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Income Tax Act 2007

Recharacterisation of certain transactions - Transfers of relationship property

FB 1C: Obligations for periods before and from transfer of property

You could also call this:

"Tax responsibilities when property is transferred during a relationship settlement"

Illustration for Income Tax Act 2007

When you transfer property as part of a relationship settlement, you are still responsible for all tax obligations related to the property up until the transfer. You will be treated as having acquired the property at the same cost as the person who transferred it to you, and as having acquired it on the same date they got it. The person who transferred the property to you is treated as no longer owning it, and sections FB 2 to FB 21 have priority over this rule.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6759417.

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Part FRecharacterisation of certain transactions
Transfers of relationship property

FB 1CObligations for periods before and from transfer of property

  1. A transferor of property on a settlement of relationship property remains responsible for all tax obligations relating to the property and the period ending immediately before the transfer.

  2. In determining the tax obligations relating to property transferred on a settlement of relationship property and the period beginning with the transfer,—

  3. the transferee is treated as—
    1. acquiring the property at the cost of the property to the transferor; and
      1. acquiring the property on the date on which the transferor acquired the property; and
        1. acquiring and holding the property with the status, intention, and purpose of the transferor in relation to the property:
        2. the transferor is treated as having not owned the property.

          1. Sections FB 2 to FB 21 override this section.

          Notes
          • Section FB 1C: inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 165(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).