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Income Tax Act 2007

Definitions and related matters - Measurement of company ownership

YC 18C: Railways restructure not affecting Crown economic ownership

You could also call this:

“Crown remains economic owner despite railway restructure”

This section is about how the restructure of New Zealand’s railways doesn’t change who owns and controls it economically. It applies to New Zealand Railways Corporation, KiwiRail Holdings Limited, and any company that’s fully owned by KiwiRail Holdings Limited right after the railways change hands.

From the time New Zealand Railways Corporation is first treated as one person for tax purposes, KiwiRail Holdings Limited is treated as if it existed and was that same person. It’s also treated as if it owned the same parts of other companies that New Zealand Railways Corporation owned before the change.

KiwiRail Holdings Limited can choose to join an existing group of companies for tax purposes on or after 31 December 2012, even if it doesn’t follow all the usual rules for joining.

These rules don’t stop changes in who owns shares, who the tax ‘person’ is, what parts of companies are owned, or other things that might happen after the railways change hands.

In this section, ‘Railways vesting’ means the same thing as it does in section EZ 68.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM5522756.

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YC 18B: Corporate reorganisations not affecting economic ownership, or

“Changes in company structure that don't affect who really owns the business”

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Part Y Definitions and related matters
Measurement of company ownership

YC 18CRailways restructure not affecting Crown economic ownership

  1. This section applies for New Zealand Railways Corporation, KiwiRail Holdings Limited, and any company that, immediately after the Railways vesting, is in the same wholly-owned group as KiwiRail Holdings Limited for the purposes of the tests of ownership and control in:

  2. Parts I and O (which relate to losses and memorandum accounts):
    1. the consolidation rules:
      1. the amalgamation rules.

        1. Starting from when New Zealand Railways Corporation is first treated as having a notional single person under section YC 5, KiwiRail Holdings Limited is treated as—

        2. existing and having the same notional single person under section YC 5 that KiwiRail Holdings Limited has immediately after the Railways vesting:
          1. holding the ownership interests in other companies that New Zealand Railways Corporation held before the Railways vesting.

            1. KiwiRail Holdings Limited may choose to join an existing consolidated group on and after 31 December 2012, despite section FM 38 (Notice requirements on forming or joining consolidated group).

            2. Subsection (2) does not prevent a change in shareholders, notional single person, the holdings of ownership interests, or other circumstances occurring after the Railways vesting.

            3. In this section,—

              Railways vesting has the same meaning as in section EZ 68 (Definitions).

              Notes
              • Section YC 18C: inserted (with effect on 31 December 2012), on , by section 101 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
              • Section YC 18C(5) ownership interest: repealed (with effect on 1 April 2015), on , by section 283 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).