CB 6ABResidential land transferred in relation to certain family trusts and other capacities

1. The bright-line acquisition date for land, when a trustee of a trust (trust A) disposes of the land, is the bright-line acquisition date that the transferors (the transferors) of the land to the trustee had, if the transferors transfer the land to the trustee on or after 1 April 2022 and—

2. trust A is a rollover trust and the transferors are settlors and, at the time that the transferors transfer the land to the trustee,—
   1. the transferors are beneficiaries of trust A; and
   2. at least 1 transferor is a principal settlor of trust A:
3. the transferors are trustees of a trust (trust B) that is a rollover trust, and, for trust A,—
   1. all the beneficiaries are the same as for trust B, and trust A is also a rollover trust:
   2. all the natural person beneficiaries are either the same as, or close family associates of a principal settlor of, trust B, and trust A is also a rollover trust.

4. When persons (the transferees) dispose of land that was transferred to them from a trustee of a trust that is a rollover trust (trust A), the bright-line acquisition date for the land is the bright-line acquisition date that the trustee of trust A had for the land if the trustee transfers the land to the transferees on or after 1 April 2022 and either,—

5. if the transferees had previously transferred the land to the trustee, the transferees acquire proportionally the same amount of land back from the trustee and, at the time the trustee transfers the land to the transferees,—
   1. the transferees are beneficiaries of trust A; and
   2. at least 1 transferee is a principal settlor of trust A; or
6. if the transferees had not previously transferred the land to the trustee, all transferees were principal settlors at the time the trustee acquired the land and at the time the trustee transferred the land to the transferees.

7. For the purposes of applying subsections (1)(a) and (2), the transferors and transferees may have different capacities in relation to the different criteria in those subsections (for example: a transferee may be a settlor in their personal capacity and be a beneficiary as an LTC owner).

8. If a person in 1 capacity transfers land to themselves in a different capacity, then the bright-line acquisition date for the land when they dispose of it to a third party in that different capacity is the bright-line acquisition date that the person first had for the land. The transfer to the different capacity must be on or after 1 April 2022.

9. Rollover trust means, at the time of a relevant transfer to or from a relevant trust,—

11. all principal settlors are beneficiaries of the trust; and
12. all principal settlors are close family associates; and
13. all beneficiaries are close family beneficiaries.

14. Close family beneficiary means, for the relevant trust, a beneficiary that is 1 or more of the following:

15. a principal settlor:
16. a trustee of another trust and at least 1 beneficiary of the other trust is a close family associate of a beneficiary of the relevant trust:
17. any association, club, institution, society, organisation, or trust not carried on for the private profit of any person whose funds are applied wholly or principally to any civic, community, charitable, philanthropic, religious, benevolent, or cultural purpose, whether in New Zealand or elsewhere, and, in the case of it having 1 principal settlor only, the trust has 1 or more beneficiaries who are close family associates of the principal settlor:
18. a close family associate of another beneficiary who is also a principal settlor:
19. a company in which a 50% or more voting interest, or a 50% or more market value interest if a market value circumstance exists, is owned by a beneficiary of the trust that is—
    1. a principal settlor of the trust:
    2. a close family associate of another beneficiary that is a principal settlor of the trust:
20. a charity registered under the Charities Act 2005.

21. Two persons are close family associates if 1 or more of the following applies:

22. they are within 4 degrees of blood relationship:
23. they are married, in a civil union, or in a de facto relationship:
24. 1 person is within 4 degrees of blood relationship to the other person’s spouse, civil union partner, or de facto partner.

25. This section does not apply for the transfer of shares in an LTC to or from a trustee.