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Income Tax Act 2007

General collection rules - Withholding tax on resident passive income (RWT)

RE 31: When limited partnerships have RWT-exempt status

You could also call this:

“Rules for limited partnerships that don't have to pay some taxes”

When you are in a limited partnership with RWT-exempt status, some rules apply. You need to know that payments made by the partnership are not considered payments made by individual limited partners. Payments made to limited partners are also treated as payments made to the partnership, not the individual partner.

If the partnership has to pay RWT, the general partner is responsible for paying it if they were a partner when the liability was incurred. You are still considered a general partner until the Commissioner is notified that you are no longer a partner.

The rules about RWT-exempt status for limited partnerships were updated by the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025, which you can read more about on the legislation website.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1427089.

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Part R General collection rules
Withholding tax on resident passive income (RWT)

RE 31When limited partnerships have RWT-exempt status

  1. This section applies when a limited partnership has RWT-exempt status.

  2. For the purposes of the RWT rules, a payment that the limited partnership makes is treated as a payment made by the partnership and not by a limited partner of the partnership.

  3. For the purposes of the RWT rules, a payment made to a limited partner of the limited partnership in their capacity as a partner is treated as a payment made to the partnership and not to the partner.

  4. A general partner is jointly and severally liable for the RWT that the limited partnership is required to pay if the general partner was a partner in the partnership when the partnership incurred the RWT liability.

  5. For the purposes of subsection (4), a general partner continues as a partner until the date the Commissioner is notified that they are no longer a partner.

Notes
  • Section RE 31: inserted (with effect on 1 April 2008), on , by section 125(1) (and see section 125(2) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).