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Income Tax Act 2007

Taxation of certain entities - Terminating provisions

HZ 9: Elections to treat existing debt funding special purpose vehicles as transparent

You could also call this:

“Choosing to make existing debt funding vehicles tax-transparent”

You can choose to treat your existing debt funding special purpose vehicles as transparent for tax purposes. This applies if you transferred any of your assets to one of these vehicles before the Taxation Act 2019 became law.

To make this choice, you need to include the income and expenses of the debt funding special purpose vehicle in your tax return. You can do this for any tax year that starts after the Taxation Act 2019 became law.

Once you make this choice, you can’t change your mind. The choice starts from the beginning of the tax year you make it in, and it keeps going until the company or trust stops being a debt funding special purpose vehicle.

This rule is more important than the rule in section HR 9BA about choosing to treat debt funding special purpose vehicles as transparent.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS179743.

Topics:
Money and consumer rights > Taxes
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HZ 10: What happens when election is made under section HZ 9?, or

“Special tax rules apply when a debt funding company is chosen”

Part H Taxation of certain entities
Terminating provisions

HZ 9Elections to treat existing debt funding special purpose vehicles as transparent

  1. This section applies when an originator transferred any of their assets to a debt funding special purpose vehicle before the date on which the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 receives the Royal assent.

  2. An originator makes an election referred to in section HR 9 (Debt funding special purpose vehicles are transparent if election made by originator) by returning income derived and expenditure incurred by the debt funding special purpose vehicle in their return of income for an income year starting on or after the date on which the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 receives the Royal assent.

  3. An election under this section—

  4. cannot be revoked; and
    1. has effect from the start of the income year for which the election is made; and
      1. remains in effect until the relevant company or trustee of a trust stops being a debt funding special purpose vehicle.

        1. This section overrides section HR 9BA (Elections to treat debt funding special purpose vehicles as transparent).

        Notes
        • Section HZ 9: inserted, on , by section 227(1) (and see section 227(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).