Plain language law

New Zealand law explained for everyone

CW 55BA: Tertiary education institutions and subsidiaries
or “Tax exemption for tertiary education institutions and their subsidiaries”

You could also call this:

“Tax-free refunds for some foreign investment fund fees”

If you own a part of a foreign investment fund (FIF), this law might apply to you. It’s about when you get money back from fees.

Here’s how it works: Sometimes, your FIF pays fees to another company. That company might give you some of that money back. We call this a rebate.

This law says the rebate money is tax-free if four things are true:

Your FIF paid fees to another company.
You got some of that fee money back as a rebate.
You’re not allowed to claim the original fees as a tax deduction.
You don’t use something called the “comparative value method” to work out your FIF income or loss.

If all these things are true, then you don’t have to pay tax on the rebate. The government calls this “exempt income”.

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Next up: CW 55BB: Minors' income, to limited extent

or “Tax exemption on some income for young people under certain conditions”

This section applies to a person having an attributing interest in a foreign investment fund when—
the FIF pays fees to another person; and
the person derives, from the other person, a rebate of the fees; and
the person is not allowed a deduction for the fees; and
the person's FIF income or loss from the interest is not calculated using the comparative value method.

Notes

Section CW 55BAB: inserted (with effect on 1 April 2009), on 27 February 2014, by section 20(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).