“CP 1 Portfolio investor allocated income

• The amount of portfolio investor allocated income of a person who is an investor in a portfolio tax rate entity is income of the person in the income year that includes the end of the entity's income year for which the person is allocated the amount.

  “Defined in this Act: income, income year, investor, portfolio investor allocated income, portfolio tax rate entity, ”.

“KiwiSaver and complying superannuation fund tax credits

“CX 1B KiwiSaver and complying superannuation fund tax credits

• A payment by the Commissioner of an amount of a tax credit under subpart KJ (KiwiSaver scheme and complying superannuation fund tax credits) is excluded income of the person deriving the payment.

  “Defined in this Act: amount, Commissioner, excluded income, ”

• “(i) is a natural person other than a trustee; and”.

• “(b) excluded income of the investor, if paragraph (a) does not apply, to the extent to which the amount of the distribution exceeds the total of the following:

  • “(i) the amount of the distribution that is fully imputed, as that term is defined in section NG 2(3) (Non-resident withholding tax imposed):

  • “(ii) the amount of the distribution that is fully dividend withholding payment credited, as that term is defined in section NG 2(4).”

“CX 44E Rebates of certain fees by portfolio tax rate entities

• A rebate of fees allocated to an investor as a member of a portfolio investor class by a portfolio tax rate entity is excluded income of the investor if the rebate is included in the calculation of the entity's portfolio entity tax liability under section HL 20 (Portfolio entity tax liability and rebates of portfolio tax rate entity for period) for the investor, the portfolio investor class, and a portfolio calculation period.

  “Defined in this Act: excluded income, investor, portfolio calculation period, portfolio entity tax liability, portfolio investor class, portfolio tax rate entity, ”.

“DB 43B Certain investors have deduction for portfolio investor allocated loss

• “When this section applies

  “(1) This section applies to an investor in a portfolio investor class of a portfolio tax rate entity for a portfolio calculation period of the entity when—

  • “(a) the investor—

    • “(i) is a zero-rated portfolio investor for the portfolio calculation period:

    • “(ii) has all or part of a portfolio investor exit period included in the portfolio calculation period and the entity makes payments of tax under section HL 21 (Payments of tax by portfolio tax rate entity making no election); and

  • “(b) the portfolio calculation period includes a portfolio allocation period for which the person is allocated an amount of portfolio investor allocated loss under subpart HL (Portfolio investment entities).

  “Deduction

  “(2) The investor has a deduction for an income year for the amount of portfolio investor allocated loss if—

  • “(a) the portfolio tax rate entity makes payments of tax under section HL 21 or HL 22 (Payments of tax by portfolio tax rate entity choosing to pay provisional tax) and the investor's income year includes the end of the portfolio calculation period:

  • “(b) the portfolio tax rate entity makes payments of tax under section HL 23 (Payments of tax by portfolio tax rate entity choosing to make payments when investor leaves) and the investor's income year includes the end of the tax year in which the portfolio calculation period occurs.

  “Defined in this Act: deduction, income year, investor, portfolio allocation period, portfolio calculation period, portfolio investor allocated loss, portfolio, investor class, portfolio tax rate entity, tax, tax year, zero-rated portfolio entity, ”.

“DB 43C Certain fees charged by portfolio tax rate entities to investors not allowed as deductions

• “When this section applies

  “(1) This section applies to an investor in a portfolio investor class of a portfolio tax rate entity when—

  • “(a) the investor incurs fees in relation to the investor's portfolio investor interest; and

  • “(b) the amount of the fees is included in the calculation of the entity's portfolio entity tax liability under section HL 20 (Portfolio entity tax liability and rebates of portfolio tax rate entity for period) for the investor, the portfolio investor class, and a portfolio calculation period.

  “No deduction

  “(2) The investor is denied a deduction for the amount of the fees.

  “Link with subpart DA

  “(3) This section overrides the general permission.

  “Defined in this Act: deduction, general permission, investor, portfolio calculation period; portfolio entity tax liability, portfolio investor class, portfolio investment entity., ”

“Exception

• “(1B) Even if 1 of the tests in subsection (1) is met, a foreign company is not a CFC if—

  • “(a) the foreign company is a foreign investment vehicle; and

  • “(b) one of the New Zealand residents is—

    • “(i) a portfolio investment entity:

    • “(ii) an entity eligible to be a portfolio investment entity:

    • “(iii) a life insurance company.”

• “(2) If any of the tests in subsection (1) is met at any time in a foreign company's accounting period and the exception in subsection (1B) does not apply at that time, the company is treated as a CFC for the whole of the accounting period.”

• “(b) is a company, a superannuation scheme, or the trustee of a trust that would be a unit trust if there were more than 1 subscriber, purchaser, or contributor participating as beneficiaries under the trust; and”.

• “(d) has investors who, if they are resident in New Zealand, would meet the investor interest size requirements under section HL 9 if the entity were a portfolio investment entity; and

• “(e) meets the further eligibility requirements relating to investments under section HL 10.”

• “(a) 20 persons, treating all interests held by persons associated under section OD 8(3) (Further definitions of associated persons) and included by subsection (4) as being held by 1 person:”.

• “(a) the investor's portfolio investor interest in the portfolio investor class or another portfolio investor class—

  • “(i) before the end of the second month after the portfolio calculation period, if the entity has made an election under section HL 21; or

  • “(ii) within 3 months of the end of the tax year, if the entity has made an election under section HL 22; or

  • “(iii) within 2 months of the end of the tax year, if the entity has made an election under section HL 23:

• “(b) the amount of each distribution to the investor as a member of the portfolio investor class or another portfolio investor class.”

• “(vi) portfolio investor allocated income:

• “(vii) distributions from superannuation funds.”

• “(a) the investment must—

  • “(i) carry voting interests in the company equal to or less than 20%, if the company is not a unit trust; or

  • “(ii) have a market value equal to or less than 20% of the total market value of all shares in the company, if the company is a unit trust:

• “(b) the amount that is 10% of the total market value of all the entity's investments must be greater than the total market value of all the entity's investments in—

  • “(i) shares in a company that is not a unit trust that carry voting interests of more than 20% in the company:

  • “(ii) shares in a company that is a unit trust that have a market value of more than 20% of the total market value of all shares in the company.”

• “(5) The class shareholding investment requirement is that, for each portfolio investor class and each investment referred to in subsection (3),—

  • “(a) the portfolio class fraction of the investment must—

    • “(i) correspond to voting interests in the company equal to or less than 20%, if the company is not a unit trust; or

    • “(ii) have a market value equal to or less than 20% of the total market value of all shares in the company, if the company is a unit trust:

  • “(b) the amount that is 10% of the total market value of all the class's interests in the entity's investments must be greater than the total market value of all the class's interests in the entity's investments in—

    • “(i) shares in a company that is not a unit trust that carry voting interests of more than 20% in the company:

    • “(ii) shares in a company that is a unit trust that have a market value of more than 20% of the total market value of all shares in the company.”

“HL 11B Unlisted company may choose to become portfolio listed company

• “Election

  “(1) A company that is not listed on a recognised exchange in New Zealand may choose under section HL 11 to become a portfolio investment entity that is a portfolio listed company if the company—

  • “(a) would meet the requirements of paragraph (a) of the definition of qualifying unit trust if it were a unit trust; and

  • “(b) has resolved to become a company listed on a recognised exchange in New Zealand if it were to obtain the required consents; and

  • “(c) has applied to the Securities Commission for an exemption to disclose in a prospectus its intention to become a listed company; and

  • “(d) satisfies the Commissioner that the company would apply to become a listed company if it were to obtain the required consents.

  “Election effective for 2 years

  “(2) A company that makes an election under subsection (1) ceases to be a portfolio listed company from the last day of the period of 2 years from when the election is effective, if the company is not listed on a recognised exchange in New Zealand on that day.

  “Defined in this Act: company, portfolio investment entity, portfolio listed company, qualifying unit trust, recognised exchange, unit trust, widely-held company., ”

• “(b) the entity, if treated as becoming a portfolio investment entity when the election would be effective, would cease under section HL 4 to be eligible.”

“New Zealand Superannuation Fund treated as disposing of, and reacquiring, property

• “(4) The New Zealand Superannuation Fund is treated for the purposes of subsection (3) as if it made an election that would be effective on 1 October 2007.”

• “(ab) a month, if the entity has a portfolio calculation period of a quarter and chooses the portfolio allocation period by giving a notice to the Commissioner—

  • “(i) before the tax year:

  • “(ii) when the entity chooses to become a portfolio tax rate entity; or”.

• “(i) the portfolio entity formation loss that is allocated to the portfolio allocation period and the portfolio investor class as allowed by section HL 28:”.

“Fees

• “(11) Fees is the amount of fees for ongoing management and administration services paid from or charged to the account of the investor as a member of the portfolio investor class on the day in the portfolio allocation period.

“Rebates

• “(12) Rebates is the amount of rebates of fees paid or credited by the entity to the account of the investor as a member of the portfolio investor class on the day in the portfolio allocation period.”

• “(a) of an amount of income tax equal to the part of the portfolio entity tax liability of the entity for the portfolio calculation period that does not relate to a payment by the entity under section HL 23B; and”.

“HL 23B Optional payments of tax by portfolio tax rate entities

• “When this section applies

  “(1) This section applies to a portfolio tax rate entity that makes payments of tax under section HL 21 or HL 23 if an investor reduces the investor's portfolio investor interest in the entity.

  “Optional payment during tax year of income tax relating to investor

  “(2) The entity may make a payment of income tax to the Commissioner representing an amount of the portfolio entity tax liability of the entity for the investor and the investor's portfolio investor interest for the tax year.

  “Time of optional payment

  “(3) A payment under this section must be made by the end of the month after—

  • “(a) the portfolio calculation period in which the reduction of the investor's portfolio investor interest occurs, if the entity makes payments of tax under section HL 21; or

  • “(b) the month in which the reduction of the investor's portfolio investor interest occurs, if the entity makes payments of tax under section HL 23.

  “Defined in this Act: Commissioner, income tax, investor, portfolio, entity tax liability, portfolio investor interest, portfolio tax rate entity, tax year., ”

“Portfolio investor allocated income for period

• “(2) The person is treated as deriving from the portfolio tax rate entity in an income year an amount of portfolio investor allocated income equal to the greater of zero and the amount described in subsection (4) for portfolio allocation periods in the entity's income year that ends in the person's income year.

“Portfolio investor allocated loss for period

• “(3) The person is treated as having in relation to the portfolio tax rate entity in an income year an amount of portfolio investor allocated loss equal to,—

  • “(a) if the portfolio tax rate entity makes payments of tax under section HL 21 or HL 23, the greater of—

    • “(i) the amount by which zero is more than the amount described in subsection (4) for portfolio allocation periods in the entity's income year that ends in the person's income year:

    • “(ii) zero; or

  • “(b) if the portfolio tax rate entity makes payments of tax under section HL 22, zero.”

• “(a) subsections (7) and (8) apply—

  • “(i) to the income year in which the tax year ends, if the investor is a zero-rated portfolio investor; or

  • “(ii) to the income year corresponding to the tax year, if the entity makes payments of tax under section HL 21 and the portfolio allocation period includes part of a portfolio investor exit period for the investor.”

• “(a) if the investor is not a portfolio tax rate entity and the credits are under subpart LC (Foreign tax), a credit against income tax payable by the investor of the amount given by subsection (8):”.

“Amount of credit for foreign tax — zero-rated portfolio investors, other than portfolio investment entities, and investors having portfolio investor exit period

• “(8) An investor to whom subsection (7)(a) applies is treated as receiving for the tax year, for credits under subpart LC, a credit that is the lesser of—

  • “(a) the amount of the allocated credits:

  • “(b) the amount calculated by multiplying the amount of portfolio investor allocated income for the investor for the tax year by,—

    • “(i) if the investor is not a zero-rated portfolio investor, the investor's portfolio investor rate for the portfolio allocation period ending before the investor's portfolio investor exit period; or

    • “(ii) if the investor is a zero-rated portfolio investor, the basic rate of tax for the investor for the tax year under schedule 1 (Basic rate of income tax and specified superannuation contribution withholding tax).”

“Other investor: credit for entity for foreign tax credits

• “(10) The entity is treated as receiving for the tax year of the portfolio calculation period, for credits under subpart LC allocated to a portfolio investor class and an investor other than a zero-rated portfolio investor as a member of the portfolio investor class, a credit of an amount given by subsection (10C) against income tax payable by the entity as described by subsection (10B).

“Use of credit

• “(10B) The credit is against income tax payable by the entity for—

  • “(a) the portfolio calculation period and portfolio calculation periods—

    • “(i) later in the tax year, if the entity makes payments of tax under section HL 21; or

    • “(ii) earlier or later in the tax year, if the entity makes payments of tax under section HL 22 or HL 23; and

  • “(b) the investor as a member of the portfolio investor class or another portfolio investor class.

“Amount of credit

• “(10C) The amount of the credit is the lesser of the following:

  • “(a) the total of—

    • “(i) the credits allocated to the portfolio calculation period and the investor as a member of the portfolio investor class; and

    • “(ii) the credits allocated to earlier portfolio calculation periods in the tax year and the investor that are not used by the entity as a credit against income tax payable for those portfolio calculation periods and for the investor as a member of the portfolio investor class or another portfolio investor class:

  • “(b) the amount of the entity's portfolio entity tax liability—

    • “(i) for the investor as a member of the portfolio investor class or another portfolio investor class; and

    • “(ii) the portfolio calculation period and earlier portfolio calculation periods in the tax year; and

    • “(iii) not met by a credit allocated to an earlier portfolio calculation period.”

“Amount of portfolio entity formation loss available for allocation to portfolio allocation period

• “(3) The maximum amount of portfolio entity formation loss that a portfolio tax rate entity may allocate to a portfolio allocation period (the relevant period) is—

  • “(a) the amount of the portfolio entity formation loss that has not been allocated to an earlier portfolio allocation period, if, at the time the entity becomes a portfolio investment entity, the amount of portfolio entity formation loss is less than 5% of the total market value of the entity's portfolio entity investments; or

  • “(b) the amount calculated using the formula in subsection (4), if paragraph (a) does not apply.

“Formula

• “(4) The maximum amount of portfolio entity formation loss under subsection (3)(b) that a portfolio tax rate entity may allocate to a relevant period is calculated using the formula—

  

“Definition of items in formula

• “(5) In the formula in subsection (4),—

  • “(a) initial loss is the amount of portfolio entity formation loss at the time the entity becomes a portfolio investment entity:

  • “(b) days is—

    • “(i) the number of days in the period beginning with the day on which the entity becomes a portfolio investment entity and ending on the last day of the relevant period, if that number is less than or equal to 1095; or

    • “(ii) 1095, if paragraph (a) does not apply:

  • “(c) loss used is the amount of portfolio entity formation loss allocated to portfolio allocation periods before the relevant period.

“Amount of portfolio entity formation loss available for allocation to portfolio investor class and portfolio allocation period

• “(6) The maximum amount of portfolio entity formation loss that a portfolio tax rate entity may allocate to a portfolio investor class for a relevant period is the lesser of the following amounts:

  • “(a) the maximum amount of portfolio entity formation loss given for the relevant period by subsection (3):

  • “(b) the amount calculated using the formula—

    

“Definition of items in formula

• “(7) In the formula in subsection (6)(b),—

  • “(a) class net income is the amount of portfolio class net income for the portfolio investor class for the portfolio allocation period:

  • “(b) credits is the total amount allocated to the portfolio investor class and the relevant period of—

    • “(i) imputation credits:

    • “(ii) Maori authority credits:

    • “(iii) credits for resident withholding tax:

    • “(iv) dividend withholding payment credits:

  • “(c) rate is the rate of tax for companies given by schedule 1, part A, clause 5 (Basic rates of income tax and specified superannuation contribution withholding tax).”

• “(f) provide to each portfolio investment entity in which the portfolio investor proxy holds portfolio investor interests for investors in a portfolio investor class, information concerning the investors and the portfolio investor interests that may be relevant to whether the portfolio investment entity meets the eligibility requirements for the entity.”

“Subpart KJ—KiwiSaver scheme and complying superannuation fund tax credits

“KJ 1 Tax credits relating to KiwiSaver scheme and complying superannuation fund members

• “Tax credit

  “(1) The Commissioner must pay, in accordance with section KJ 4, the amount of a tax credit calculated under section KJ 3 for a member credit year to a person's fund provider, to the extent to which the person meets the requirements in section KJ 2 in the member credit year.

  “Rules

  “(2) Section KJ 5 provides some rules for the tax credit.

  “Defined in this Act: amount, Commissioner, complying superannuation fund, KiwiSaver scheme, member credit year,

“KJ 2 Person's requirements

• For the purposes of section KJ 1(1), the requirements are that the person—

  • “(a) is a member of a complying superannuation fund or a KiwiSaver scheme for which there are member credit contributions; and

  • “(b) is 18 years or older; and

  • “(c) is not entitled to withdraw an amount from a fund or scheme under schedule 1, clause 4(3) of the KiwiSaver Act 2006 or a rule the same as that clause; and

  • “(d) has their principal place of residence in New Zealand, unless they meet the requirement in paragraph (e); and

  • “(e) if paragraph (d) does not apply, is an employee of the State services within the meaning of the State Sector Act 1988 who is serving outside New Zealand, or is a person who works overseas as a volunteer or for token payment and—

    • “(i) the person works for a charitable organisation named in regulations made under the Student Loan Scheme Act 1992; and

    • “(ii) the work meets 1 or more of the requirements in sections 38AEA(a)(i) to (iii) of the Student Loan Scheme Act 1992; and

  • “(f) where they meet the requirements of paragraph (e), they give the relevant fund provider evidence, in writing, of why and for what period in a member credit year they meet the relevant requirements of paragraph (e).

  “Defined in this Act: amount, complying superannuation fund, fund provider, KiwiSaver scheme, member credit contributions, member credit year,

“KJ 3 Tax credit amount

• “Amount

  “(1) For the member credit year, the amount of the tax credit is equal to the number of dollars calculated using the following formula:

  

  “Definition of items in formula

  “(2) In the formula,—

  • “(a) base amount is the lesser of—

    • “(i) the total amount of a person's member credit contributions to all of the person's complying superannuation funds and KiwiSaver schemes for the member credit year:

    • “(ii) $1,042.86:

  • “(b) included days are the number of days in the member credit year on which the person meets the requirements in section KJ 2.

  “Defined in this Act: amount, complying superannuation fund, KiwiSaver scheme, member credit contributions, member credit year,

“KJ 4 Payment

• “No deduction: direct credit

  “(1) The Commissioner must pay the amount of tax credit under section KJ 1 to a person's fund provider who complies with section 68C of the Tax Administration Act 1994—

  • “(a) without deduction or set-off for any other amount that the person or the person's fund provider may be obliged to pay the Commissioner; and

  • “(b) by direct credit; and

  • “(c) in accordance with subsection (2).

  “Pro-rata payment

  “(2) Where the person has more than 1 fund provider to whom the Commissioner must pay an amount of tax credit for a member credit year, the Commissioner must pay a fund provider the proportion of the tax credit that the person's member credit contributions for the year bears to the total amount of a person's member credit contributions to all of the person's complying superannuation funds and KiwiSaver schemes for the year.

  “Defined in this Act: amount, Commissioner, complying superannuation fund, KiwiSaver scheme, member credit contributions, member credit year,

“KJ 5 Rules

• “Credit: amount

  “(1) The fund provider is treated as being credited with the tax credit for the purposes of recovering any amount of tax credit paid in excess of that properly payable under section KJ 1.

  “Treatment as contribution

  “(2) Despite subsection (1), the amount of the tax credit paid to a person's fund provider is treated, for the purposes of this Act and the KiwiSaver Act 2006, as a Crown contribution for the person, and the amount is subject to the relevant KiwiSaver scheme rules and complying fund rules.

  “Treatment of tax credit

  “(3) The fund provider must credit the amount of the tax credit on a pro rata basis across the investment products to which the person has subscribed or has been allocated as a member of the relevant KiwiSaver scheme or complying superannuation fund.

  “Vesting of tax credit

  “(4) The tax credit must vest in the person immediately after it is paid to the fund provider, despite any provision to the contrary.

  “Override of other rules: tax credit paid in excess

  “(5) Despite the relevant KiwiSaver scheme rules or complying fund rules, the relevant fund provider may remove an amount from a person's account for the purposes of paying to the Commissioner an amount of tax credit paid in excess of that properly payable under this subpart.

  “Claw-back: permanent emigration

  “(6) When a person for whom amounts of tax credit have been paid makes an application for, or otherwise wants, after their permanent emigration, a withdrawal or transfer from their KiwiSaver scheme or complying superannuation fund under schedule 1, clause 14 of the KiwiSaver Act 2006 or a rule the same as that clause,—

  • “(a) the relevant fund provider must pay to the Commissioner the lesser of—

    • “(i) the amounts of the tax credit that have been paid for the person:

    • “(ii) the amount of employee's superannuation accumulation for the person, for a complying superannuation fund:

    • “(iii) the amount of the member's accumulation as defined in the KiwiSaver Act 2006 for the person, for a KiwiSaver scheme; and

  • “(b) the payment described in paragraph (a) must be made to the Commissioner as soon as practicable.

  “Recovery of claw-back

  “(7) A fund provider has an amount of tax credit paid in excess of that properly payable to the extent to which they fail to comply with subsection (6)(b).

  “Defined in this Act: amount, complying fund rules, complying superannuation fund, employee's superannuation accumulation, fund provider, KiwiSaver scheme., ”

• “(2) The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the amount of income tax paid by the portfolio tax rate entity in relation to the portfolio investor allocated income referred to in subsection (1).”

“LD 10B Credit for zero-rated portfolio investor for tax paid by entity in relation to portfolio investor allocated income

• “(1) This section applies for a taxpayer and a tax year if the taxpayer is a zero-rated portfolio investor and has for the tax year portfolio investor allocated income from a portfolio tax rate entity that pays income tax in relation to the portfolio investor allocated income.

  “(2) The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the amount of income tax paid by the portfolio tax rate entity in relation to the portfolio investor allocated income referred to in subsection (1).”

• “(2) The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the amount of the payment by the entity under section HL 21(5).”

“Relationship of other methods with standard method, and modification of standard method

• “(4) Subsections (5) to (7) override subsection (3). Section MZ 10 (Calculating provisional tax instalments: section MB 4) modifies subsection (3).”

“Relationship with other provisions

• “(9) Section MZ 11 (Calculating provisional tax instalments: sections MB 7 and MB 10) modifies this section.”

“Relationship with other provisions

• “(4) Section MZ 11 (Calculating provisional tax instalments: sections MB 7 and MB 10) modifies this section.”

“MZ 10 Calculating provisional tax instalments: section MB 4

• “(1) This section applies, for a person's 2008–09 and 2009–10 income years, when the person is a new tax rate person for that year.

  “(2) For the purposes of the standard method, and for the purpose of a provisional taxpayer calculating the amount of provisional tax under section MB 4(3),—

  • “(a) for the 2008–09 income year,—

    • “(i) 105% is treated as 95% in section MB 4(3)(a):

    • “(ii) 110% is treated as 100% in section MB 4(3)(b):

  • “(b) for the 2009–10 income year, 110% is treated as 100% in section MB 4(3)(b).

“MZ 11 Calculating provisional tax instalments: sections MB 7 and MB 10

• “(1) This section applies, for a person's 2008–09 and 2009–10 income years when—

  • “(a) the person is a new tax rate person for that year; and

  • “(b) in section MB 7, residual income tax amounts or income tax assessment amounts (the income tax amounts) are required for determining base amounts or otherwise for calculating the GST ratio; and

  • “(c) the income tax amounts are for the 2007–08 or earlier income years.

  “(2) For the purposes of a provisional taxpayer calculating the amount of an instalment under section MB 10, the income tax amounts in section MB 7 are treated as reduced by multiplying them by 0.9.

“MZ 12 Calculating provisional tax instalments: section MB 9

• “(1) This section applies, for a person's 2008–09 and 2009–10 income years, when the person is a new tax rate person for that year.

  “(2) For the purposes of a provisional taxpayer calculating the amount of an instalment under section MB 9(2),—

  • “(a) for the 2008–09 income year,—

    • “(i) section MB 9(3)(a)(i) is treated as requiring a 5% reduction of the taxpayer's residual income tax for the preceding tax year, not a 5% uplift:

    • “(ii) section MB 9(3)(a)(ii) is treated as requiring the taxpayer's residual income tax for the tax year immediately before the preceding tax year, not a 10% uplift:

  • “(b) for the 2009–10 income year, section MB 9(3)(a)(ii) is treated as requiring the taxpayer's residual income tax for the tax year immediately before the preceding tax year, not a 10% uplift.”

• “(cb) require that an employee's superannuation accumulation is used to fund benefits that are calculated only by reference to the amount of that accumulation; and”.

• “(eb) require that, for a transfer to another complying superannuation fund in accordance with paragraph (d), the new fund provider is given notice of—

  • “(i) any written evidence provided to the old fund provider by the member under section KJ 2(f) (Person's requirements); and

  • “(ii) the amounts of tax credits received by the old fund provider under subpart KJ (KiwiSaver scheme and complying superannuation fund tax credits); and

  • “(iii) any information held by the old fund provider that would be relevant to the new fund provider making a claim under section 68C of the Tax Administration Act 1994, including information as to the periods for which claims have already been made; and”.

• “(ab) the amount of tax credit under section KJ 1 (Tax credits relating to KiwiSaver scheme and complying superannuation fund members) that is treated as a Crown contribution for an employee under section KJ 5(2) (Rules):”.

“fund provider means, for a person, and for a complying superannuation fund or a KiwiSaver scheme of which they are a member, the trustees of the fund or scheme.”

• “(a) means, for a person,—

  • “(i) an income tax liability for the person and a tax year calculated under subpart BC (Calculating and satisfying income tax liabilities), if subparagraph (ii) does not apply; or

  • “(ii) income tax for the person and a tax year calculated under subpart HL (Portfolio investment entities), if the person is a portfolio tax rate entity; and”.

“member credit contributions means, for a person, and for their complying superannuation funds and KiwiSaver schemes, superannuation contributions to the person's funds and schemes to the extent to which the contributions are subject to KiwiSaver scheme rules or complying fund rules, but excluding

• “(a) specified superannuation contributions; and

• “(b) contributions withdrawn under a mortgage diversion facility provided for in regulations made under section 229 of the KiwiSaver Act 2006

“member credit year means a year beginning on 1 July and ending on 30 June”.

“new tax rate person—

• “(a) means a person who uses a 30% basic rate that applies for the 2008–09 and later income years:

• “(b) includes a portfolio tax rate entity”.

“permitted withdrawal means a withdrawal that is permitted under—

• “(a) the KiwiSaver scheme rules, as defined in section 4 of the KiwiSaver Act 2006:

• “(b) the complying fund rules, as defined in this Act”.

“portfolio listed company means a company that—

• “(a) is listed on a recognised exchange in New Zealand or meets the requirements of section HL 11B (Unlisted company may choose to become portfolio listed company); and

• “(b) has become a portfolio investment entity under section HL 12 (Becoming portfolio investment entity); and

• “(c) has not ceased to be a portfolio listed company under section HL 11B; and

• “(d) has not ceased to be a portfolio investment entity under section HL 14 (Ceasing to be portfolio investment entity)”.

• “(d) is not a portfolio defined benefit fund”.

• “(ii) is a portfolio investment entity other than a person to whom paragraph (a)(ii) applies:”.

• “(iv) is a superannuation fund other than a person to whom paragraph (a)(ii) applies:”.

“widely-held GIF means a group investment fund that meets the requirements of—

• “(a) the investor membership requirements in section HL 6(1) (Investor membership requirement), treating the group investment fund as having 1 portfolio investor class comprised of all investors in the fund:

• “(b) one or more of paragraphs (a) and (c) to (e) of the definition of qualifying unit trust, treating the group investment fund as a unit trust

“widely-held superannuation fund means a superannuation fund that meets the requirements of—

• “(a) the investor membership requirements in section HL 6(1) (Investor membership requirement), treating the superannuation fund as having 1 portfolio investor class comprised of all investors in the fund:

• “(b) one or more of paragraphs (a) and (c) to (e) of the definition of qualifying unit trust, treating the superannuation fund as a unit trust”.

“8B

• To the extent to which taxable income of a trustee is not included in the provisions of clause 7 or 8, the basic rate of income tax is 30 cents for every dollar of that taxable income, if the income is of a trustee of—

  • “(a) an approved unit trust to which the Income Tax Act (Exempt Unit Trusts) Order 1990 applies:

  • “(b) a widely-held superannuation fund:

  • “(c) a widely-held GIF.”

• “(2) A portfolio tax rate entity must give to an investor in the entity who has a portfolio investor exit period a notice giving information that the Commissioner considers relevant for each portfolio calculation period in which the portfolio exit period falls, if the portfolio calculation period is more than a day.”

• “(2B) A notice required by subsection (2) must be given by the end of the month following the quarter in which the portfolio investor exit period ends.”

• “(xi) portfolio investor allocated income that is not excluded income; and”.

• “(a) by 30 June of the calendar year in which the tax year ends, if—

  • “(i) the person has a corresponding income year that does not end after the end of the tax year; and

  • “(ii) the person is a portfolio tax rate entity or portfolio investor proxy at the end of that corresponding income year; or

• “(b) by the end of the second month following the month in which the corresponding income year for the portfolio tax rate entity ends, if—

  • “(i) the portfolio tax rate entity has a corresponding income year that ends after the end of the tax year; and

  • “(ii) the person is a portfolio tax rate entity or portfolio investor proxy at the end of that corresponding income year; or

• “(c) by the end of the second month following the month in which the entity ceases to be a portfolio tax rate entity or portfolio investor proxy, if the person ceases to be a portfolio tax rate entity or portfolio investor proxy in the corresponding year.”

“68C Tax credit relating to KiwiSaver and complying superannuation fund members: member credit form

• “(1) This section applies to a person's fund provider.

  “(2) The fund provider must claim a tax credit under section KJ 1 of the Income Tax Act 2004 for the person for a member credit year, if the fund provider—

  • “(a) is the person's fund provider on—

    • “(i) 30 June of the member credit year; or

    • “(ii) the day in the member credit year that is before the person ceases to be a member of the fund provider's fund or scheme due to permitted withdrawals other than transfers; and

  • “(b) is reasonably satisfied of the number of days in the member credit year on which the person meets the requirements of section KJ 2(d) of that Act; and

  • “(c) has no knowledge that the person does not meet the requirements of section KJ 2(a) to (c), and (e) and (f) of that Act for any part of the member credit year.

  “(3) The fund provider must claim a tax credit for the person for the member credit year by furnishing to the Commissioner a member credit claim in relation to the person, in the form prescribed by the Commissioner. The member credit claim must—

  • “(a) contain the person's name, address, and tax file number, the amount of the person's member credit contributions for the member credit year, and any other information that the Commissioner may require; and

  • “(b) be furnished on a date determined by the Commissioner.

  “(4) The fund provider may claim a tax credit under section KJ 1 for the person for an earlier member credit year, if, for the year, the provider meets the requirements of subsection (2)(b) and (c), and is satisfied that a tax credit has not previously been claimed for the same period as their claim. The claim must be in the form prescribed under subsection (3), and contain the information required in subsection (3)(a).”

“Crown contribution means—

• “(a) the contribution made by the Crown under section 226:

• “(b) the amount of tax credit under section KJ 1 of the Income Tax Act 2004 that is treated as a Crown contribution for a member under section KJ 5(2) of that Act”.

• “(i) serving outside New Zealand; and

• “(ii) employed on New Zealand terms and conditions; and

• “(iii) serving in a jurisdiction where offers of KiwiSaver scheme membership are lawful; and”.

• “(d) if amounts are withheld for an employee under the PAYE rules solely because section OE 1(5) of the Income Tax Act 2004 applies to them.”

“permanent employees means employees—

• “(a) who are not employed in temporary employment (as described in section 12); and

• “(b) to whom the automatic enrolment rules would apply, but for the application of this section.”

• “(3) In this section, permanent employees means employees—

  • “(a) who are not employed in temporary employment (as described in section 12); and

  • “(b) to whom the automatic enrolment rules would apply, but for the application of section 14.”

• “(iv) of any written evidence provided to a provider of the old scheme by the member under section KJ 2(f) of the Income Tax Act 2004; and

• “(v) of the amounts of tax credits received by a provider of the old scheme under subpart KJ of that Act; and

• “(vi) of any information held by a provider of the old scheme that would be relevant to a provider of the new scheme making a claim under section 68C of the Tax Administration Act 1994, including information as to the periods for which claims have already been made.”

“128A Terms relating to members' tax credits implied into trust deed

• “(1) The terms relevant to the tax credits described in section KJ 1 of the Income Tax Act 2004 are implied into a trust deed that establishes—

  • “(a) a KiwiSaver scheme in relation to the KiwiSaver scheme:

  • “(b) a complying superannuation fund in relation to the complying superannuation fund.

  “(2) The law relating to the tax credits—

  • “(a) applies despite anything to the contrary in a trust deed of a scheme or fund; and

  • “(b) is enforceable by a trustee, and by a member, of the scheme or fund.”

“233 Transitional provision: pre-1 July 2007 securities law documentation

• “(1) This section applies to the following documents:

  • “(a) a prospectus that is registered under the Securities Act 1978 before 1 July 2007:

  • “(b) an investment statement under the Securities Act 1978 that is dated before 1 July 2007.

  “(2) A document to which this section applies is as valid and effectual as it would have been if the Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007 had not been enacted and as if the relevant KiwiSaver scheme or complying superannuation fund had not changed as a result.”

“17 Crown contributions: tax credits

• Despite rules 4 to 14, the amount of the Crown contribution arising from a tax credit under section KJ 1 of the Income Tax Act 2004 (disregarding any positive or negative returns for the purposes of calculating that amount of Crown contribution) may not be withdrawn—

  • “(a) before the member gives the fund provider (as that term is defined in the Income Tax Act 2004) a statutory declaration stating the periods for which the person has their principal place of residence in New Zealand; and

  • “(b) to the extent to which the fund provider has notice that their claim for a tax credit is wrong, because the number of included days under section KJ 3 of the Income Tax Act 2004 is wrong.”

• “(a) the registered scheme and any relevant participation agreement evidence rules that subject the following to complying fund rules:

  • “(i) relevant contributions:

  • “(ii) returns on relevant contributions:

  • “(iii) relevant benefits; and”.

“97B Application under section HL 11

• Despite section 2(22), a person may make an application under section HL 11 as if section 97 came into force on 1 April 2007”.

“5

• The Commissioner of Inland Revenue crediting, transferring, refunding, dealing with, or otherwise paying, a tax credit under the Income Tax Act 2004 or the Tax Administration Act 1994, if that tax credit is one to which entitlement arises under subpart KJ of the Income Tax Act 2004.”