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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 treat some special companies as transparent for tax purposes"

Illustration for Income Tax Act 2007

You need to know about a rule called Elections to treat existing debt funding special purpose vehicles as transparent. This rule applies when someone transferred assets to a special vehicle before a certain date, which is when the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 was agreed to. You make an election by including the special vehicle's income and expenses in your tax return. You make this election for an income year starting on or after the date the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 was agreed to. This election cannot be changed and it starts from the beginning of the income year you make it for. It stays in effect until the special vehicle is no longer used for debt funding. This rule overrides another rule called section HR 9BA.

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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.

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Topics:
Money and consumer rights > Taxes
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Part HTaxation 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).