Plain language law

New Zealand law explained for everyone

Goods and Services Tax Act 1985

Returns and payment of tax - Calculation of tax payable: deductions, apportionment, other adjustments

21HC: Transitional rules relating to members of unit title bodies corporate

You could also call this:

"Rules for unit title owners to claim tax deductions on shared expenses"

If you are a member of a unit title body corporate, you can make a deduction for a supply of goods or services under section 20(3)(hc) if certain conditions are met. You must be a registered person and the unit title body corporate must not be registered at the time of the supply. The supply must be for the purpose of making a supply under a power or duty set out in section 84 of the Unit Titles Act 2010 that you use in making taxable supplies.

You must also make a return for the taxable period that treats part of the supply as being acquired by you for use in making taxable supplies. You need to keep sufficient records to enable the Commissioner to ascertain the nature of the supply, the amount you pay for it, and that it is a taxable supply used by you in making taxable supplies.

If the unit title body corporate charges you on a basis other than your ownership interest or utility interest, as defined in section 5 of the Unit Titles Act 2010, the amount you can deduct is the tax fraction of the amount charged to you. Otherwise, the amount you can deduct is the tax fraction of an amount that is fair and reasonable based on your proportion of ownership interest and utility interest in the body corporate.

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 It might be out of date or be missing some parts.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

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6755948.

Topics:
Money and consumer rights > TaxesBusiness > Industry rules
Previous

21HB: Transitional rules related to treatment of dwellings, or

"Rules for taxing homes bought or sold between 1986 and 2011"

Next

21I: Fringe benefits and entertainment expenses, or

"Rules about tax on work perks and entertainment expenses"

Part 3Returns and payment of tax
Calculation of tax payable: deductions, apportionment, other adjustments

21HCTransitional rules relating to members of unit title bodies corporate

  1. A member of a unit title body corporate that acquires a supply of goods or services (the corporate supply) in a taxable period that ends on or after 1 November 2010 and before 3 November 2015, or that includes 3 November 2015, may make a deduction under section 20(3)(hc) for the taxable period if—

  2. at the time of the corporate supply, the unit title body corporate is not a registered person and the member is a registered person; and
    1. the unit title body corporate acquires the corporate supply for the purpose of making a supply (the membership supply) under a power or duty set out in section 84 of the Unit Titles Act 2010 that the member uses in making taxable supplies; and
      1. the member makes a return for the taxable period that treats part of the corporate supply as being acquired by the member for use in making taxable supplies; and
        1. the member maintains sufficient records to enable the Commissioner to ascertain—
          1. the nature of the corporate supply and the membership supply; and
            1. the amount that the member pays to the unit title body corporate for the membership supply; and
              1. that the corporate supply is a taxable supply; and
                1. that the membership supply is used by the member in making taxable supplies.

                2. If the corporate supply is acquired for the purpose of making a membership supply for which the unit title body corporate charges the member on a basis other than the member’s ownership interest or utility interest, as defined in section 5 of the Unit Titles Act 2010, the amount that the member may deduct is the tax fraction of the amount charged to the member for the membership supply.

                3. For a corporate supply to which subsection (2) does not apply, the amount that the member may deduct is the tax fraction of an amount that, as a proportion of the amount paid by the unit title body corporate for the corporate supply, is fair and reasonable based on the proportion that the member owns of the total ownership interest and utility interest in the body corporate as defined in section 5 of the Unit Titles Act 2010.

                Notes
                • Section 21HC: inserted (with effect on 1 October 2011), on , by section 279 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                • Section 21HC(1): amended (with effect on 1 October 2011), on , by section 360(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section 21HC(1)(c): amended (with effect on 1 October 2011), on , by section 360(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).