Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Interest incurred in relation to certain land

DH 3: When this subpart applies: companies

You could also call this:

“This subpart applies to close companies, residential land companies, and certain company groups”

This part of the law applies to companies in certain situations. You need to know about three types of companies it affects:

  1. If you’re a close company, which means a small group of people own or control it, this law applies to you. But if you’re an exempt Māori company, it doesn’t apply to you.

  2. If you’re not a close company, but you are a residential land company (which means you own houses or land people live on), this law applies to you. However, it doesn’t apply if you’re part of a group where one company owns all the others completely.

  3. If you’re not a close company, but you’re part of a group that owns residential land and one company in the group owns all the others completely, this law applies to you too.

Remember, these rules are about when this part of the law applies to different types of companies. It’s important to know which category your company fits into to understand if this law affects you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS675441.

Topics:
Money and consumer rights > Taxes
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DH 2: When this subpart applies, or

“This explains when the rules about interest deductions apply”

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DH 4: When this subpart does not apply: exemptions for new builds, development, social or emergency or transitional housing, and council housing, or

“This law doesn't apply to certain types of housing and land development”

Part D Deductions
Interest incurred in relation to certain land

DH 3When this subpart applies: companies

  1. This subpart applies to a company, if—

  2. the company is a close company, and it is not an exempt Māori company:
    1. the company is not a close company, and—
      1. it is a residential land company; and
        1. it is not a member of a wholly-owned group:
        2. the company is not a close company, and it is a residential land wholly-owned group member.

          Notes
          • Section DH 3: inserted (with effect on 27 March 2021), on , by section 75 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).