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EZ 76: Consideration for property or services: non-IFRS foreign ASAPs before 2014–15 income year
or “Rules for valuing certain foreign financial agreements before 2014-15”
You could also call this:

“Rules for handling old substituting debentures after law change”

This law talks about what happens when the rules for substituting debentures change. If you have a substituting debenture, here’s what you need to know:

On 31 March 2015, your substituting debenture will be treated as if it’s cancelled. The person who issued the debenture will be treated as if they paid you the remaining amount owed, including any interest.

On 1 April 2015, it’s as if you and the issuer made a new financial arrangement. This new arrangement will have the same terms as the old debenture, but the amount of money involved will be what was owed to you when the old debenture was cancelled.

If your debenture doesn’t meet the new rules, these changes will happen on different dates. They’ll occur at the end of the tax year before the one where your debenture stopped meeting the rules, and at the start of the tax year where it stopped meeting the rules.

Any changes in voting interest or market value interest because of these new rules won’t affect continuity provisions. This means it won’t impact things that depend on ownership staying the same over time.

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Next up: EZ 78: Insurance for Hurunui/Kaikōura earthquake damage of property: treatment as disposal and reacquisition

or “Insurance pay-outs for Hurunui/Kaikōura earthquake damage treated as property sale and repurchase”
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Part E Timing and quantifying rules
Terminating provisions: Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 77Substituting debentures repeal: transitional rules

  1. This section applies if a person has a substituting debenture when the application of section 102 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (the repealing Act) repeals section FA 2(5) and a financial arrangement arises.

  2. On 31 March 2015—

  3. the substituting debenture is treated as cancelled; and
    1. an amount equal to the debenture's outstanding principal and outstanding accrued interest is treated as paid to the holder, for the cancellation, by the debenture's issuer.

      1. On 1 April 2015, the debenture's issuer and holder are treated as entering into the financial arrangement on the same terms and conditions as the debenture described in subsection (2), except that the amount of principal treated as advanced to the issuer is an amount equal to the amount described in subsection (2)(b).

      2. If the repeal of section FA 2(5) arises because a debenture that a person is party to fails to meet a requirement described in section 102(5) of the repealing Act, then—

      3. subsection (2) is modified to apply on the last day of the tax year immediately before the tax year that corresponds to the income year in which the failure to meet a requirement occurs; and
        1. subsection (3) is modified to apply on the first day of the tax year that corresponds to the income year in which the failure to meet a requirement occurs.

          1. A change in voting interest or market value interest that arises from the application of section 102 of the repealing Act is ignored for the purposes of the continuity provisions.

          Notes
          • Section EZ 77: inserted, on , by section 101 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).