Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Employee or contractor income - Definitions

CE 7CB: Meaning of market value

You could also call this:

“How 'market value' is defined for employee share schemes”

When you’re dealing with an employee share scheme, ‘market value’ means two things. First, it has the same meaning as defined in section YA 1 of the Income Tax Act 2007, specifically in paragraphs (a) and (b) of the definition of ‘market value’.

Second, for shares or options that are listed on a recognised stock exchange, ‘market value’ can also mean the average price over five days of trading. This is called the ‘5-day volume weighted average price’. You can also use other methods that the Commissioner of Inland Revenue agrees are similar to this 5-day average.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS328881.

Topics:
Money and consumer rights > Taxes
Previous

CE 7C: Meaning of employee share scheme beneficiary, or

“Who can benefit from an employee share scheme”

Next

CE 7D: Meaning of replacement employee share scheme, or

“What a replacement employee share scheme means”

Part C Income
Employee or contractor income: Definitions

CE 7CBMeaning of market value

  1. Market value, for an employee share scheme—

  2. has the same meaning as in section YA 1 (Definitions), definition of market value, paragraphs (a) and (b); and
    1. includes, for a share or option quoted on the official list of a recognised exchange, at the time, an amount equal to the 5-day volume weighted average price or any other method that is accepted by the Commissioner or is comparable to the 5-day volume weighted average price, for such shares or options.

      Notes
      • Section CE 7CB: inserted (with effect on 29 September 2018), on , by section 94 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).