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Tax Administration Act 1994

Transfers of excess tax - Transfer rules

173M: Transfer of excess tax to another taxpayer

You could also call this:

"Move extra tax paid to another person or company"

Illustration for Tax Administration Act 1994

You can ask the Commissioner to transfer extra tax to another taxpayer. The Commissioner can transfer a maximum amount to the other taxpayer. This amount is based on what the other taxpayer owes or needs to pay. You can ask to transfer tax to a company, a shareholder, or a relative. You can also ask to transfer tax to a trust or a partner in your business. The Commissioner will decide how much tax to transfer. A family trust is a trust set up to help a person or their family. A relative is someone connected to you by blood, marriage, or a de facto relationship. You can choose when the tax is transferred, but it must be on a date allowed by section 173L. If you are a trustee of a family trust, you can ask to transfer tax to a beneficiary. The Commissioner will work out how much tax to transfer based on what the beneficiary owes or needs to pay. You can find more information about section CW 41 or CW 42 of the Income Tax Act 2007.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM357961.

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Money and consumer rights > Taxes
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"Move extra tax paid to another time or tax type"

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"Rules for keeping interest when paying taxes for someone else"

Part 10BTransfers of excess tax
Transfer rules

173MTransfer of excess tax to another taxpayer

  1. A taxpayer or their agent may request that the Commissioner transfer an amount of the excess to another taxpayer. If the date chosen under subsection (4) is after the start of the requested period for the other taxpayer, the maximum amount that the Commissioner may transfer is the total of—

  2. debt owing by that other taxpayer to the Commissioner at the date chosen under subsection (4) for the requested period; and
    1. the other taxpayer’s deferrable tax at the date chosen under subsection (4) for the requested period; and
      1. the amount of an adjustment for the requested period under a notice of proposed adjustment, if there is no deferrable tax under paragraph (b) for the period; and
        1. any amount agreed with the Commissioner.

          1. A request may be made for a transfer between a taxpayer and—

          2. a company in the same group of companies; or
            1. a shareholder employee of the taxpayer; or
              1. a company in which the taxpayer is a shareholder employee; or
                1. a partner in the same partnership; or
                  1. a relative; or
                    1. a trustee of a family trust of which the taxpayer is a beneficiary; or
                      1. a tax pooling intermediary's tax pooling account; or
                        1. another taxpayer not listed in paragraphs (a) to (fb).

                          1. A taxpayer, being a trustee of a family trust, may request a transfer to a beneficiary of the trust. If the date chosen under subsection (4) is after the start of the requested period for the beneficiary, the maximum amount that the Commissioner may transfer is the total of—

                          2. debt owing by the beneficiary to the Commissioner at the date chosen under subsection (4) for the requested period; and
                            1. the beneficiary’s deferrable tax at the date chosen under subsection (4) for the requested period; and
                              1. the amount of an adjustment for the requested period under a notice of proposed adjustment, if there is no deferrable tax under paragraph (b) for the period; and
                                1. any amount agreed with the Commissioner.

                                  1. The taxpayer may choose the date on which the amount is transferred, being—

                                  2. if subsection (2)(a) to (2)(f) or subsection (3) applies, a date allowed by section 173L:
                                    1. if subsection (2)(fb) applies, a date that occurs on or after the date of the request:
                                      1. if subsection (2)(g) applies, the later of the following dates:
                                        1. a date that occurs on or after the date of the request; and
                                          1. a date that occurs after the date that the relevant return is filed for the period in which the excess arose.

                                          2. In this section—

                                            family trust means a trust that is established primarily to benefit—

                                            1. a natural person for whom the settlor has natural love and affection; or
                                              1. an organisation or a trust whose income is exempt under section CW 41 or CW 42 of the Income Tax Act 2007; or
                                                1. a natural person that satisfies paragraph (a) and an organisation or a trust that satisfies paragraph (b)

                                                  relative means, in relation to a person, another person connected with the person by blood relationship, marriage, civil union or de facto relationship.

                                                  1. For the purpose of the relative definition—

                                                  2. persons are connected by blood relationship if one is the child of the other:
                                                    1. persons are connected by marriage, civil union or de facto relationship if one person is in a marriage, civil union or de facto relationship with the other:

                                                        1. Repealed
                                                        Notes
                                                        • Section 173M: inserted, on , by section 91(1) of the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002 (2002 No 32).
                                                        • Section 173M(1): replaced (with effect on 5 February 2017), on , by section 126(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                                                        • Section 173M(2)(fb): inserted, on , by section 692(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                        • Section 173M(2)(g): replaced, on , by section 692(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                        • Section 173M(3): replaced (with effect on 5 February 2017), on , by section 126(2) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                                                        • Section 173M(4): amended (with effect on 5 February 2017), on , by section 126(3) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                                                        • Section 173M(4)(ab): inserted, on , by section 692(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                        • Section 173M(5) family trust paragraph (b): amended, on (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).
                                                        • Section 173M(5) relative: amended, on , by section 206(1) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                                        • Section 173M(5) relative: amended, on , by section 3(1) of the Tax Administration Amendment Act 2005 (2005 No 22).
                                                        • Section 173M(6)(b): replaced, on , by section 3(1) of the Tax Administration Amendment Act 2005 (2005 No 22).
                                                        • Section 173M(6)(c): amended, on , by section 206(2) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                                        • Section 173M(7): repealed, on , by section 3(1) of the Tax Administration Amendment Act 2005 (2005 No 22).