“Reference to unrelated persons

• “(7) A reference in a double tax agreement to 2 persons being unrelated is to be read, if possible, as a reference to 2 persons being not associated.”

“Relationship with section CD 44

• “(6) Section CD 44(7)(c) (Available capital distribution amount) overrides this section.”

• “(2) Subsection (1) applies to a person who recognises the expenditure as an expense for financial reporting purposes—

  • “(a) under paragraph 5.1 or 5.2 of the old reporting standard or because paragraph 5.4 of that standard applies; or

  • “(b) under paragraph 68(a) of the new reporting standard applying, for the purposes of that paragraph, paragraphs 54 to 67 of that standard.”

• “(b) would be required, if the expenditure were material, to recognise it for financial reporting purposes—

  • “(i) under paragraph 5.1 or 5.2 of the old reporting standard or because paragraph 5.4 of that standard applies; or

  • “(ii) under paragraph 68(a) of the new reporting standard applying, for the purposes of that paragraph, paragraphs 54 to 67 of that standard.”

“new reporting standard means the New Zealand Equivalent to International Accounting Standard 38, approved by the Accounting Standards Review Board, and as amended from time to time or an equivalent standard issued in its place

“old reporting standard means Financial Reporting Standard No 13 1995 (Accounting for Research and Development Activities) being the standard approved under the Financial Reporting Act 1993, or an equivalent standard issued in its place, that applies in the tax year in which the expenditure is incurred”.

“DP 11 Cost of timber

• “When this section applies

  “(1) This section applies when a person—

  • “(a) derives an amount on the disposal of timber and the amount is income of the person under section CB 24 (Disposal of timber or right to take timber) or CB 25 (Disposal of land with standing timber); and

  • “(b) has incurred expenditure in relation to the timber that is a cost of timber.

  “Deduction

  “(2) The person is allowed a deduction for the amount that is a cost of timber.

  “Timing of deduction

  “(3) The deduction is allocated—

  • “(a) for timber harvested from the land before the time of disposal, to the income year in which the timber first becomes trading stock of the person; or

  • “(b) otherwise, by section EA 2 (Other revenue account property).

  “Meaning of timber

  “(4) In this section, timber includes—

  • “(a) the creation or grant of a right to take timber:

  • “(b) the grant of a licence or an easement in relation to timber:

  • “(c) the creation of a forestry right as defined in section 2 of the Forestry Rights Registration Act 1983, other than a right in favour of the proprietor in relation to establishing, maintaining, and harvesting timber.

  “Link with subpart DA

  “(5) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

  “Defined in this Act: amount, capital limitation, cost of timber, deduction, dispose, general permission, income year, timber, trading stock”.

• “(2) This section does not apply to expenditure that a person incurs in acquiring a film right if—

  • “(a) the person operates a television station, a television network, or a cable television system, and the film right is acquired mainly to enable the film to be broadcast in New Zealand; or

  • “(b) the film is intended to be shown as an advertisement; or

  • “(c) the expenditure is film production expenditure; or

  • “(d) section DS 2B applies to the expenditure.”

• “(1) Income from forestry—

  • “(a) means income derived from either or both of the sales described in subsection (2) in the circumstances described in subsection (3):

  • “(b) includes PFSI forestry income.”

“However, those sections do not apply if the change—

• “(a) is from the fair value method; and

• “(b) relates to a financial arrangement that is not subject to a creditor workout.”

• “(b) the CFC is a network operator under the Telecommunications (Interception Capability) Act 2004 (a network operator), or—

  • “(i) a group of persons has, for the whole of the CFC's accounting period, voting interests and, if a market circumstance exists, market value interests, of more than 50% in the CFC; and

  • “(ii) the group of persons also has, for the whole of the CFC's accounting period, voting interests and, if a market value circumstance exists, market value interests, of more than 50% in a network operator; and”.

• “(6) For an income interest that the person has held for more than 12 months, the person may follow a simplified calculation process by choosing to be treated as holding, at all times in the income year, the same interest, including zero interest, that they held at the end of the income year. The person makes the election by completing their return of income accordingly for the relevant income year.”

• “(c) the item net transfers is ignored.”

• “(c) the item net transfers is ignored.”

• “(b) the policy, if it is a credit card repayment insurance, meets the requirements for the period described in subsection (5)(c), or, if it is a workplace group policy, meets the requirements for the period described in subsection (5)(d); and”.

• “(d) for a life insurance policy for which the premium may vary each year, the period that starts on the grandparenting start day and ends on the earlier of the following:

  • “(i) the day that the policy expires:

  • “(ii) the day that is before the 3 years anniversary of the grandparenting start day.”

“Meaning of credit card repayment insurance

• “(11) Credit card repayment insurance means a life insurance policy, if the benefits of the cover are for the repayment of an outstanding debt balance of a credit card.”

“Meaning of workplace group policy

• “(15) Workplace group policy means a life insurance policy with multiple individual's life insurance cover grouped under it, if––

  • “(a) the group of individuals is a class of employees of an employer, and the employer is the sponsor of the policy, or are members of a union registered under the Employment Relations Act 2000, and the trade union is the sponsor of the policy; and

  • “(b) the general public is excluded; and

  • “(c) where the sponsor is the employer, joining the life insurance policy is compulsory for the relevant class of employees, and the employer must pay the premiums.”

“Cancellation of notional imputation credits

• “(5) For the purposes of subsection (4), to the extent to which the dividend paid by the company would have had an imputation credit attached that arose under section OB 16 (ICA attribution for personal services) in the absence of the election made under subsection (4)(c), the credit is treated as cancelled immediately before it would have been attached under sections HA 14 to HA 19 (which relate to dividends paid by qualifying companies).”

• “(b) it is paid to a beneficiary of the trust in the income year or by the date after the end of the income year referred to in subsection (1B).”

“Date by which income must be allocated

• “(1B) The date referred to in subsection (1)(b) is the later of the following:

  • “(a) a date that falls within 6 months of the end of the income year; or

  • “(b) the earlier of—

    • “(i) the date on which the trustee files the return of income for the income year; or

    • “(ii) the date by which the trustee must file a return for the income year under section 37 of the Tax Administration Act 1994.”

“Deriving beneficiary income in same year

• “(3) When an amount derived by a trustee in an income year is also beneficiary income, the beneficiary is treated as having derived the income in the same tax year as that corresponding to the trustee's income year.”

“Employee share purchase agreements

• “(3B) Despite subsection (2), an employer is not a settlor for the purposes of the trust rules in relation to a payment made by them to the trustee of an employee share purchase agreement if—

  • “(a) some or all of the payment is used by the trustee to acquire shares under the terms of the employee share purchase agreement; and

  • “(b) an amount that is less than or equal to the payment used by the trustee would be income of an employee under section CE 1(d).”

“Extension in certain cases

• “(3) Despite subsection (2), a company that makes an election under subsection (1) does not stop being a portfolio listed company from the last day of the period of 2 years from the date on which the election takes effect if—

  • “(a) the company has met the requirements of subsection (1)(b) and (c) before 2 July 2009; and

  • “(b) a period of 4 years from the date on which the election takes effect has not expired.

“Further extension granted by Commissioner

• “(4) Despite subsections (2) and (3), the Commissioner may grant a further extension of time if it is reasonable in the circumstances.”

“Extension of period for listing

• “(3) Despite subsection (2), a company does not lose PIE status at the end of the 2-year period if—

  • “(a) the company has met the requirements of subsection (1)(b) and (c) before 2 July 2009; and

  • “(b) a period of 4 years from the date on which the election takes effect has not expired.

“Further extension granted by Commissioner

• “(4) Despite subsections (2) and (3), the Commissioner may grant a further extension of time if it is reasonable in the circumstances.”

“HM 56 Prescribed investor rates: schedular rates

• The prescribed investor rate of an investor in a multi-rate PIE is determined under schedule 6, table 1 (Prescribed rates: PIE investments and retirement scheme contributions).

  “Defined in this Act: investor, multi-rate PIE, prescribed investor rate

“HM 57 Prescribed investor rates for certain investors: 0%

• An investor (a zero-rated investor) in a multi-rate PIE has a prescribed investor rate of 0% if they are resident in New Zealand and are—

  • “(a) a company:

  • “(b) an organisation or trust with income that is exempt income under section CW 41 or CW 42 (which relate to charities):

  • “(c) a proxy acting under section HM 33:

  • “(d) an exiting investor referred to in section HM 61:

  • “(e) a PIE or superannuation fund, other than a trustee who chooses a rate under schedule 6, table 1, row 3 or 5 (Prescribed rates: PIE investments and retirement scheme contributions):

  • “(f) a person who derives income as a trustee and does not choose a rate under schedule 6, table 1, row 3, 5, or 7.

  “Defined in this Act: company, exempt income, investor, multi-rate PIE, PIE, prescribed investor rate, resident in New Zealand, superannuation fund, trustee

“HM 58 Transitional rate for certain investors

• “When this section applies

  “(1) This section applies to a multi-rate PIE in relation to an income year that starts on or after 1 April 2010 and a person who—

  • “(a) is an investor in the PIE; and

  • “(b) has a notified investor rate of 19.5% on the last day of the preceding income year.

  “Rate applying

  “(2) The person's notified investor rate for income years that start on or after 1 April 2010 is treated as 21%.

  “Exception: new notified rate

  “(3) Subsection (2) does not apply if the person advises the PIE of a different notified investor rate for an income year.

  “Defined in this Act: income year, multi-rate PIE, notified investor rate, notify”.

• “(5) The Commissioner may notify a PIE to disregard an investor's notified investor rate if the Commissioner considers the rate is incorrect. The notification must include a rate for the investor that the Commissioner considers appropriate.”

• “(b) an event or situation arises that means the entity would lose PIE status under any of sections HM 24 to HM 28 because the requirements of sections HM 11 to HM 16 were not met in each quarter of the 12-month period.”

“HZ 7 Saving of binding rulings relating to settlements on trusts

• “When, and extent to which, this section applies

  “(1) This section applies when, and to the extent to which,—

  • “(a) before the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009—

    • “(i) an applicant has applied for a binding ruling on an arrangement that is entered into, or that the applicant seriously contemplates will be entered into, before the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009:

    • “(ii) a binding ruling is issued; and

  • “(b) the binding ruling is about a provision of the Income Tax Act 2004 on the question of whether an amount is a settlement on a trust; and

  • “(c) the binding ruling—

    • “(i) is made before or after the commencement of this Act and continues to exist at the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009; and

    • “(ii) is made in relation to a provision of the Income Tax Act 2004 to which section ZA 4 (Saving of binding rulings) of this Act would have applied but for the intended change listed in schedule 51 (Identified changes in legislation) for section HC 27(2) (Who is a settlor?); and

  • “(d) in the absence of this section, the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 would mean that the binding ruling would cease to apply because of section 91G of the Tax Administration Act 1994.

  “Ruling about new law

  “(2) The binding ruling continues to exist despite the intended change referred to in subsection (1)(c)(ii) from the commencement of this Act to the date on which the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 receives the Royal assent.

  “No confirmation rulings

  “(3) To the extent to which a binding ruling continued by subsection (2) exists and applies to an arrangement, or to a person and an arrangement, the Commissioner must not make a binding ruling in the period that starts on the date of the commencement of this Act and ends on the date on which the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 receives the Royal assent on how—

  • “(a) the new law applies to the arrangement or to the person and the arrangement; or

  • “(b) this subsection applies to the arrangement or to the person and the arrangement.

  “Defined in this Act: arrangement, binding ruling, Commissioner, settlement”.

• “(b) a person whose imputation credits are included in their annual gross income for the tax year: the amount of converted imputation credits arising under section LE 2 (Use of remaining credits by companies and trustees) for the tax year:”.

• “(7) For the purposes of this subpart, a tax loss component, for a tax year,—

  • “(a) means an amount included in a tax loss for the tax year under subsection (3) or (4):

  • “(b) includes—

    • “(i) an unused amount of a net loss or an amount treated as a net loss or as an available net loss of a person arising before the 2008–09 tax year which the person was entitled to have carried forward under section IE 1 (Net losses may be offset against future net income) of the Income Tax Act 2004 to that tax year:

    • “(ii) an amount included in a company's loss balance at the end of the tax year to which sections IZ 4 to IZ 6 (which relate to tax losses for tax years before 1992) apply, or other amounts in relation to which modified continuity rules apply.”

“Relationship with other provisions in this subpart

• “(2) Sections IA 5 and IA 8 to IA 10 override this section.”

• “(1) A company's tax loss component is carried forward in a loss balance only if the minimum continuity requirements of subsections (2) and (3) are met. The tax loss component includes an unused tax loss component carried forward from an earlier income year.”

• “(4) If a tax loss component cannot be carried forward because the requirements of subsections (2) and (3) are not met, the company may apply section IP 3 (Continuity breach: tax loss components of companies carried forward) to determine whether some or all of the tax loss component is carried forward in a loss balance.”

“Treatment as tax loss component

• “(1B) For the purposes of the application of sections IA 5, IA 6, IA 9, and IA 10, a ring-fenced tax loss under this section is treated as if it were a tax loss component.”

• “(2) The general rules do not apply in relation to a loss-attributing qualifying company (LAQC) to an amount that would have been a loss balance carried forward under section IA 3(4) in the absence of sections HA 21 and HA 24(5) (which relate to the treatment of losses by LAQCs). The provisions that deal with these losses are sections HA 24 to HA 27.”

“IQ 1B Losses carried forward to tax year

• An attributed CFC net loss or a FIF net loss or both may be carried forward to a tax year. Section IA 5 (Restrictions on companies' loss balances carried forward) applies for the purposes of this subpart as if the net loss were a tax loss component.

  “Defined in this Act: attributed CFC net loss, FIF net loss, tax loss component, tax year”.

“Meaning of net mining loss

• “(3) For the purposes of this subpart, a net mining loss means that part of a net loss of a mining company, a resident mining operator, or a non-resident mining operator that is described in section IA 7(7) (Restrictions relating to ring-fenced tax losses).”

“Use against other income

• “(5) The company may subtract the amount of the net mining loss from its net income that is not attributable to the mining permit area but only after meeting for the whole of the continuity period the requirements set out in sections GB 3 (Arrangements for carrying forward loss balances: companies) and IA 5 (Restrictions on companies' loss balances carried forward). For the purposes of applying section IA 5, the net mining loss is treated as if it were a tax loss component.”

• “(2) The petroleum miner's tax loss is reduced by the amount of the deduction, but only to the extent of the amount of the tax loss. For the reduction in their tax loss, the petroleum miner is allowed a deduction in an earlier tax year for an amount that is equal to the amount of the reduction. The deduction is allocated under section EJ 14 (Spreading deduction backwards).”

“Amounts available

• “(1) In calculating their policyholder base income tax liability for a tax year, a life insurer may use an amount of a policyholder net loss carried forward from an earlier tax year. The policyholder net loss includes an unused policyholder net loss determined under the Income Tax Act 2004 or the Income Tax Act 1994.

“Loss carried forward

• “(1B) If a life insurer has a balance of a policyholder net loss remaining for a tax year after the uses described in this section, the balance, including all unused amounts from earlier tax years, is carried forward to the next tax year as a policyholder net loss carried forward.

“Treatment as tax loss component

• “(1C) For the purposes of the application of section IA 10 (Amended assessments), a policyholder net loss under this section is treated as if it were a tax loss component.”

“Restrictions on use

• “(2B) A life insurer must not use a policyholder net loss to reduce a net loss of another life insurer in a tax year except as described in subsection (3).”

• “(a) a non-resident, if––

  • “(i) the non-resident has less than a 10% direct voting interest in the company; and

  • “(ii) the post-treaty tax rate for the dividend and the related supplementary dividend is 15% or more; or”.

		attached credit + dividend
		tax rate.

“Amounts of depreciation loss on sale of building

• “(5C) For the purposes of subsection (1), in relation to a building from the sale of which the person derives assessable income, an amount of depreciation loss allowed in the 2002–03 or earlier income year is not included in family scheme income. However, this subsection does not apply to an amount of depreciation loss of a business that under section MB 4 is treated as having no net income for the purposes of calculating family scheme income.”

• “(3) In the formula, tax rate is—

  • “(a) for subsection (1)(a) to (e), the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT and attributed fringe benefits) for the income year in which the dividend is paid:

  • “(b) for subsection (1)(f), the basic rate of income tax set out in schedule 1, part A, clause 7 for the income year in which the distribution is paid.”

• “(c) income tax paid by a life insurer to satisfy its policyholder base income tax liability; or”.

“When debit arises

• “(3) The debit arises at the time shareholder continuity is lost.”

“When debit arises

• “(3) The debit arises at the time shareholder continuity is lost.”

“When credit arises

• “(3) The credit arises at the time shareholder continuity is lost.”

“When debit arises

• “(3) The debit arises at the time shareholder continuity is lost.”

“When debit arises

• “(3) The debit arises at the time shareholder continuity is lost.”

“When debit arises

• “(3) The debit arises at the time shareholder continuity is lost.”

“When credit arises

• “(3) The credit arises at the time shareholder continuity is lost.”

• “(b) an income-tested benefit:

• “(bb) a veteran's pension, other than a veteran's pension paid under section 74J(2)(b) of the War Pensions Act 1954:

• “(bc) New Zealand superannuation, other than New Zealand superannuation paid under section 26(2)(b) of the New Zealand Superannuation and Retirement Income Act 2001:

• “(bd) a living alone payment:”.

• “(a) for an employee whose taxable income for the income year is expected to be not more than $48,000, the rate set out in schedule 2, part B, table 1, row 2; or

• “(b) for an employee whose taxable income for the income year is expected to be not more than $70,000, the rate set out in schedule 2, part B, table 1, row 3; or

• “(c) for other employees, the rate set out in schedule 2, part B, table 1, row 4.”

“Relationship with section RD 17

• “(2B) Despite subsection (2), a person must not choose a rate set out in schedule 2, part B, table 1 that is lower than the rate that would apply to the amount of extra pay under section RD 17.”

“When this section applies

• “(1) This section applies when a person pays an amount of extra pay to an employee who also receives a PAYE income payment from the person, regardless of whether the extra pay is paid with or separately from a PAYE income payment. The amount of tax for the extra pay is based on the sum of—

  • “(a) the amount of the extra pay; and

  • “(b) the annualised value of all PAYE income payments made to the employee in the period that starts 4 weeks before the date of the payment of the extra pay and ends on the date of that payment.

“Calculating annualised value

• “(1B) For the purposes of calculating the amount that is the annualised value referred to in subsection (1)(b), the amount of the extra pay referred to in subsection (1)(a) is excluded.”

“Rates applying

• “(2) For the sum of the amounts referred to in subsection (1) listed in the following paragraphs, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in the relevant row of schedule 2, part B, table 1 (Basic tax rates for PAYE income payments):

  • “(a) if the sum of the amounts is $14,000 or less, the amount determined by applying row 1:

  • “(b) if the sum of the amounts is more than $14,000 but not more than $48,000, the amount determined by applying row 2:

  • “(c) if the sum of the amounts is more than $48,000 but not more than $70,000, the amount determined by applying row 3:

  • “(d) if the sum of the amounts is more than $70,000, the amount determined by applying row 4.

“When secondary tax codes apply

• “(3) Despite subsection (2), if the person pays an amount of extra pay to an employee in relation to which the employee has notified the person that a secondary code under section 24B(3)(bb), (c), (d), or (e) of the Tax Administration Act 1994 applies, the rate under schedule 2, part B, table 1 applying to the extra pay is determined using the formula—

  extra pay + annualised amount + low threshold amount.

“Definition of items in formula

• “(4) In the formula,—

  • “(a) extra pay is the amount of the employee's extra pay:

  • “(b) annualised amount is the amount given by subsections (1)(b) and (1B):

  • “(c) low threshold amount is, as applicable,—

    • “(i) for secondary code SB, $0:

    • “(ii) for secondary code S, $14,001:

    • “(iii) for secondary code SH, $48,001:

    • “(iv) for secondary code ST, $70,001.”

• “(j) a dividend treated as derived by a person under section GB 1(3) (Arrangements involving dividend stripping).”

“RE 10B Amounts withheld from distributions to holders of FIF attributing interests

• “When this section applies

  “(1) This section applies when—

  • “(a) a distribution is made to a holder of an attributing interest in a FIF; and

  • “(b) section CD 36 (Foreign investment fund income) or EX 59(2) (Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method) applies to the distribution; and

  • “(c) an amount is withheld by the payer from the distribution because the payer has treated the distribution as resident passive income subject to the RWT rules.

  “Treatment of amount

  “(2) The amount withheld is treated as—

  • “(a) RWT for the purposes of this subpart and subpart LA (General rules for tax credits), and sections LB 3 (Tax credits for resident withholding tax), and RM 1 to RM 10 (which relate to refunds); and

  • “(b) tax paid in excess for the purposes of Part 10B of the Tax Administration Act 1994.

  “Treatment of distribution

  “(3) The distribution is treated as resident passive income for the purposes of the sections listed in subsection (2).

  “Refunds

  “(4) Subsection (2) does not apply if the payer or the holder applies under section RM 8(4) or (5) (Overpaid RWT or NRWT), as applicable, for a refund in relation to the amount withheld before the next 31 March after the date on which the amount of tax was withheld.

  “Defined in this Act: amount of tax, attributing interest, FIF, pay, resident passive income, RWT, tax”.

“Modification for companies and portfolio investment entities for 2010–11 income year

• “(5) Despite subsection (3)(a), the amount of tax that the person must withhold and pay may, if the person chooses, be calculated under subsection (3) using a tax rate of 0.30 if—

  • “(a) the payment of resident passive income that consists of interest is made to a company or a portfolio investment entity in the 2010–11 income year; and

  • “(b) the tax rate under subsection (3)(a) would be 0.33 in the absence of this subsection.”

• “(a) a person (person A) is required to pay an amount that would be treated as resident passive income in the absence of this section to another person (person B); and”.

“What this section does not apply to

• “(3) This section does not apply to an amount referred to in section CC 1(2)(a) to (d) (Land) to which section CC 9 (Royalties) applies.

“Exception: certain income from land

• “(4) Despite subsection (3), this section does apply to non-resident passive income that is an amount paid for—

  • “(a) the exploitation of, or right to exploit, plant material or a naturally occurring material or mineral arising in or on the land:

  • “(b) the removal of, or right to remove, plant material or a naturally occurring material or mineral arising in or on the land.”

“Withholding amount of tax”.

“Exclusion

• “(2) Despite subsection (1), no obligation to withhold NRWT arises in relation to an amount treated as a dividend under section GB 1(3) (Arrangements involving dividend stripping).”

“When amount treated as dividend

• “(1B) A person who derives non-resident passive income that is a dividend under section GB 1(3) (Arrangements involving dividend stripping) is treated as a filing taxpayer.”

“RF 11B Certain dividends paid to certain non-residents

• The rate of NRWT payable on a payment of non-resident passive income is 0% to the extent to which the payment is a fully imputed dividend paid to a non-resident by a company, if––

  • “(a) the non-resident has a 10% or more direct voting interest in the company:

  • “(b) the non-resident has less than a 10% direct voting interest in the company and, but for this section, the post-treaty tax rate for the dividend is less than 15%.

  “Defined in this Act: company, direct voting interest, dividend, non-resident, non-resident passive income, NRWT, pay, post-treaty tax rate”.

“When subsections (4) and (5) apply

• “(3) Subsections (4) and (5) apply when—

  • “(a) a holder of an attributing interest in a FIF receives a distribution from which an amount of tax for resident passive income has been withheld; and

  • “(b) section CD 36 (Foreign investment fund income) applies to the distribution.

“Certain FIF income: application by holder

• “(4) The holder may apply for a refund if—

  • “(a) they apply before the next 31 March after the date on which the amount was withheld, with supporting information to show that the threshold referred to in section CQ 5(1)(d) (When FIF income arises) has been exceeded for their corresponding income year; and

  • “(b) the person making the distribution has not—

    • “(i) paid them a refund of the amount; or

    • “(ii) applied themselves under subsection (5) for a refund in relation to the amount; and

  • “(c) they notify the person making the distribution of their application under this subsection.

“Certain FIF income: application by payer

• “(5) The person making the distribution may apply for a refund if—

  • “(a) they apply before the next 31 March after the date on which the amount was withheld, with supporting information to show the payment has been made to the holder without any subtraction permitted by section RA 12(5) and (6) (Adjustment to correct errors: certain excess amounts); and

  • “(b) the holder has not applied for a refund under subsection (4) in relation to the amount; and

  • “(c) they provide, in relation to the amount,—

    • “(i) a statement that they will not include particulars in an RWT withholding reconciliation statement made under section 51 of the Tax Administration Act 1994; and

    • “(ii) the disclosure information required by section 52 of that Act.

“Use of refund

• “(6) An amount of a refund paid under subsection (4) or (5) may be used under section RM 10 to satisfy a liability under the Inland Revenue Acts.”

“cost of timber, in sections DP 11, EJ 1, EW 2, EZ 44, FB 6, and FB 7 (which relate to the disposal of timber),—

• “(a) means the amount of expenditure incurred by a person in relation to timber—

  • “(i) before harvest, for a disposal of harvested timber:

  • “(ii) before the disposal of the timber or the relevant right, for a disposal of standing timber or a disposal of a right to take timber, or another right referred to in section DP 11(4) (Cost of timber); and

• “(b) includes, for section DP 11,—

  • “(i) expenditure on planning, planting, and growing the timber:

  • “(ii) expenditure incurred in relation to the rights listed in section DP 11(4); and

• “(c) excludes—

  • “(i) expenditure for which a deduction is allowed under a provision of this Act other than section DP 11:

  • “(ii) expenditure to which section DB 46 (Avoiding, remedying, or mitigating effects of discharge of contaminant) applies:

  • “(iii) an amount allowed as a deduction under section DQ 4 (Environmental restoration accounts scheme)”.

“creditor workout, in relation to a financial arrangement, means––

• “(a) a compromise, as that term is defined in section 227 of the Companies Act 1993, in writing that, for the parties to the financial arrangement, is binding under Part 14, 15, or 15A of that Act, or is otherwise legally binding, to the extent to which the compromise does not cancel all of a debt:

• “(b) a suspension in part of the repayment of any deposit, the payment of any debt, or the discharge of any obligation, under section 44 of the Corporations (Investigation and Management) Act 1989”.

• “(f) in sections FM 30, GB 38, OP 58, and OP 64 to OP 68 (which relate to consolidated groups), subpart OE (Branch equivalent tax accounts (BETA)), subpart OJ (Policyholder credit accounts (PCA)), in the FDP rules and the imputation rules, and in the definitions of benchmark dividend, combined imputation and FDP ratio, company dividend statement, excess credit amount, FDP credit, FDP ratio, imputation credit, imputation ratio, pay, and shareholder dividend statement, does not include an amount treated as a dividend under section GB 1(3) (Arrangements involving dividend stripping)”.

• “(f) in section FA 2B (Stapled debt securities), and the definitions of proportional-stapling company and stapled debt security, means—

  • “(i) a share described in paragraph (a):

  • “(ii) a share that would be a share described in paragraph (a) but for a dividend or a variation in the rate of dividend that may occur when the share is converted into another share (the other share) if the gain is attributable solely to a cause set out in paragraph (g):

  • “(iii) a share for which the dividend payable is the equivalent of the payment of interest for money lent, having regard to the factors set out in paragraph (h):

• “(g) for the purposes of paragraph (f)(ii), the causes are—

  • “(i) a change in value of the other share occurs in a period that starts no more than 30 days before the share is converted and ends when the share is converted, and the period was a term or condition of the share when the share was first issued:

  • “(ii) a term or condition of the share that existed when the share was first issued, and the term or condition sets the gain at a fixed percentage equal to 5% or a lesser percentage of the amount subscribed for the share:

• “(h) for the purposes of paragraph (f)(iii), the factors are—

  • “(i) whether or not the share is redeemable:

  • “(ii) any security provided to the shareholder, including put or call options over the share or any amount payable determined by reference to the amount of dividend payable:

  • “(iii) the variability or lack of variability of the dividend payable”.

“forestry business includes a PFSI forestry business”.

“loss balance, for a tax year,—

• “(a) means the sum of all tax loss components—

  • “(i) arising in the tax year and included in the tax loss for the tax year under section IA 2(3) and (4) (Tax losses), to the extent not used under section IA 3(1) to (3) or IA 4(1)(a) (which relate to the first use and to particular losses):

  • “(ii) arising in an earlier tax year and carried forward under section IA 3(4) to the tax year, to the extent not used under section IA 3(1) to (3) or IA 4(1)(a):

• “(b) does not include a tax loss component included in a company's loss balance at the end of the tax year if the requirements of section IA 5 (Restrictions on companies' loss balances carried forward), as modified by sections IZ 4 to IZ 6 (which relate to tax losses for tax years before 1992), have not been met”.

“net mining loss is defined in section IS 1(3) (General treatment of mining companies' net losses) for the purposes of subpart IS (Mining companies' and petroleum miners' tax losses)”.

“new reporting standard is defined in section DB 35 (Some definitions) for the purposes of section DB 34 (Research or development)”.

“old reporting standard is defined in section DB 35 (Some definitions) for the purposes of section DB 34 (Research or development)”.

“PFSI forestry business means the forestry activities carried on by a person who, as landowner, is subject to obligations under a forest sink covenant referred to in section 67X of the Forests Act 1949 in relation to the land specified in the covenant

“PFSI forestry income, for a person, means the income from a PFSI forestry business—

• “(a) relating to a forest sink covenant entered into by the person; and

• “(b) derived by the person from—

  • “(i) receiving an emissions unit under the covenant; or

  • “(ii) entering into a transaction in relation to an emissions unit received under the covenant”.

“policyholder unvested liabilities means benefits that are allocated to policyholders of profit participation policies but are not vested in a specific policyholder”.

“portable New Zealand superannuation means New Zealand superannuation paid or payable overseas under—

• “(a) section 26(2)(a) of the New Zealand Superannuation and Retirement Income Act 2001, or under section 26(2)(b) where the superannuitant is residing in a country to which section 26(1)(a) of that Act applies; or

• “(b) section 31 of the New Zealand Superannuation and Retirement Income Act 2001; or

• “(c) section 19 of the Social Welfare (Transitional Provisions) Act 1990

“portable veteran's pension means a veteran's pension paid or payable overseas under—

• “(a) section 74J(2)(a) of the War Pensions Act 1954, or under section 74J(2)(b) where the pensioner is residing in a country to which section 74J(1)(a) of that Act applies; or

• “(b) section 74O of the War Pensions Act 1954; or

• “(c) section 19 of the Social Welfare (Transitional Provisions) Act 1990”.

“post-treaty tax rate means the rate of tax, after taking into account the overriding effect of a relevant double tax agreement, if there is one, as provided by section BH 1 (Double tax agreements)”.

“retirement scheme prescribed rate, for a person and a retirement scheme contribution made for the person at a time in an income year, means a rate set out in schedule 6, table 2 (Prescribed rates: PIE investments and retirement scheme contributions)”.

“savings product policy means a life insurance policy, other than an annuity, that may or may not have a life risk component and that has or will have a surrender value which––

• “(a) is greater than zero; and

• “(b) does not arise wholly from the payback of a portion of a policyholder's premiums”.

“tax loss means an amount described in section IA 2(1) (Tax losses) and includes unused tax loss components arising in the current tax year or in an earlier tax year”.

“timber—

• “(a) is defined in section DP 11(4) (Cost of timber) for the purposes of that section:

• “(b) includes standing timber in—

  • “(i) section DP 11:

  • “(ii) section EB 24 (Apportionment on disposal of business assets that include trading stock):

  • “(iii) section FB 6 (Timber or right to take timber):

  • “(iv) section GC 1 (Disposals of trading stock at below market value):

  • “(v) the definition of dispose, paragraph (b):

  • “(vi) the definition of right to take timber:

  • “(vii) the definition of trading stock, paragraph (b)(iv)”.