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Income Tax Act 2007

Avoidance and non-market transactions - Avoidance: specific - Arrangements involving residential land

GB 55: Arrangements involving tax credits for charitable or other public benefit gifts

You could also call this:

“Rules for tax credits on charitable donations and preventing misuse”

This section of the Income Tax Act 2007 talks about what happens when someone tries to get around the rules for tax credits on charitable gifts or gifts for public benefit.

If you enter into an arrangement that is meant to defeat the purpose of section LD 1, which deals with tax credits for charitable or public benefit gifts, you might face consequences.

The Commissioner of Inland Revenue can reduce your tax credit to what they think it would have been if you hadn’t tried to work around the rules. This means you might get a smaller tax credit than you were hoping for.

Remember, it’s important to follow the rules when claiming tax credits for your charitable donations. If you try to trick the system, you could end up with less of a benefit than you expected.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS192378.

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Part G Avoidance and non-market transactions
Avoidance: specific: Arrangements involving residential land

GB 55Arrangements involving tax credits for charitable or other public benefit gifts

  1. This section applies when—

  2. a person enters into an arrangement; and
    1. the arrangement has a purpose or effect of defeating the intent and application of section LD 1 (Tax credits for charitable or other public benefit gifts).

      1. A tax credit under section LD 1 is reduced to the amount that the Commissioner considers would have arisen had the arrangement not occurred.

      Notes
      • Section GB 55: inserted, on , by section 205 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).