Rewrite Advisory Panel disestablished

The Rewrite Advisory panel was disestablished by the Minister of Revenue in late 2014. See the Minister's announcement on 2 December 2014 for more information.

Inland Revenue will still consider any unintended legislative change issues as part of its remedial work programme. You can continue to submit these on the Rewrite Advisory Panel website.

The content from this site and submitting of unintended legislative change issues will move to taxpolicy.ird.govt.nz in early 2016.

 

Unintended Legislative Changes Issues Log

This log lists unintended legislative changes received to date. You can click on the submission number to see the full details of an issue, and click on the table headings to reorder the list.

Submission numbersort ascending Section / Provision Date received Description of issue Status
183 Complying Trust Election 14/05/2014 The issue is that the election in section HC 33 of the 2007 Act should be to pay tax on the world wide income derived by the trustee that is trustee income, not just the taxable income.  The provisions of section HC 33 strictly do not permit a... Finalised
182 Residence requirements of s MC 5 16/05/2014 Someone who has made an election not to be a transitional resident would not meet the residence requirements of s MC 5, and so would not qualify for entitlements under the family scheme. This is contrary to the intention behind the introduction of... Finalised
181 Mining permit definition: cross reference error 05/06/2014 The definition of “mining permit” in the Income Tax Act 2007 contains a cross-referencing error, and The definition of existing privilege is not used correctly in the definition of “petroleum exploration expenditure”, sections DT 3, DT 8, DZ 4(2)(b... Finalised
180 HA20, IA2 and IA7 04/07/2014 Attribution of Mining Losses (Specified Minerals) to Shareholders of Loss Attributing Qualifying Companies (LAQC). Finalised
179 YA 1 & CB 2 10/06/2014 Definition of Trading Stock and Section CB 2 Finalised
178 DB 31(6)(b)(iii) 21/01/2014 Capital Limitation – deductions for bad debts from financial arrangements. Before 2004, the capital limitation did not apply to deductions for bad debts from financial arrangements.  However, the legislation changed in 2004. Finalised
177 CD 44(9) and CD 44 (18) 14/11/2013 Definition of available capital distribution amount when a company incurs a “capital loss”. Section CD 44(9) of the Income Tax Act 2007 (“the 2007 Act”) provides that a company incurs a capital loss when it disposes of “capital property” for less... Finalised
176 IE 3(1) 15/11/2013 Amalgamated Losses: The problem is that section IE 3 of the 2007 Act does not apply to all amalgamated companies, but applies only to those amalgamated companies that meet the requirements of subsection (1)(a) and (b) are not satisfied.  For example... Finalised
175 HR 8(2) 31/01/2013 The change of wording between the 2004 Act and the 2007 Act appears to have changed IRD's interpretation of who qualifies for Transitional Resident Status. Finalised
174 RD 11(1) 12/07/2013 Discretionary power to make adjustments. Finalised
173 RE 4(4) 06/05/2013 RWT Obligations – Section RE4 It appears that an amendment to the Income Tax Act 2004 which was made in the Taxation (Depreciation, Payments Dates Alignment, FBT and Miscellaneous Provisions) Act was not picked up in the rewritten 2007 Act. The... Finalised
172 FN 12(5) 15/05/2013 Companies - Imputation Groups FN 12(3) Section FN 12(3) states that if a company gives valid notice to the Commissioner stating that it is no longer to be treated as part of the imputation group, it is to be treated as leaving the imputation group... Finalised
171 FM 31 04/04/2013 Entitlement / eligibility to continue to be part of a consolidated group 2012-055 (OCTC). There may be an unintended change in the entitlement / eligibility to continue to be part of a consolidated group rule. The on-going temporal requirement that... Finalised
170 IW 1(3) 01/07/2013 ITA2007 Section IW 1(3) contains a potential unintended change in legislative outcome relating to ability of a wholly-owned group of companies being able to use group losses to satisfy shortfall penalties of any company in that wholly-owned group.... Finalised
169 HC 30(4)(a), HH 2(3)(a) 12/03/2013 Ineffective Rules - The reference in section HC 30(4)(a) to "date of election" is incorrect and should be replaced with "election expiry date". Under section HH 2 of the 2004 Act (the predecessor of section HC 30 of the 2007 Act), a settlor who... Finalised
168 RD 10(3) 04/04/2013 Scheduler payment issue – GST exclusive amount for calculating tax. Finalised
167 RM 13(3) 10/04/2013 Section MD 2(1A) 2004 Act, Legislative & Policy History Finalised
165 FC 5(3)(b) 28/01/2013 Meaning of section FC 5(3)(b) ITA 2007 is not as wide as equivalent section in ITA 2004. Finalised
164 EE 7 11/02/2013 Excepted financial arrangements are excluded from depreciable property under EE 7. s.EE 7 excludes all operating leases as they fall within the excepted financial arrangements category (s.EW 5(9)). The interpretation under the ITA 2004 is the same... Finalised
163 HC 10 07/08/2012 The removal of the word ‘only’ from the definition of complying trust in the 2007 Act has changed the application of the complying trust regime where a trust has both New Zealand resident and non-resident trustees. Finalised
162 EX 5(1)(c) and (d) 17/07/2012 The 1994 definition of  "direct control interest" does not include a person who is able to control the application of income but cannot deal with it in his or her interest. The 1997 definition does include such a person. Examples: C, a New Zealand... Finalised
161 RM 13 03/07/2012 The effect of the 2007 Act is that Australian companies that choose to maintain an ICA account in New Zealand are not limited to the credit balance of their ICA account when requesting release of a refund of overpaid income tax or when seeking a... Finalised
160 FM 5 16/04/2012 It is now unclear for which years joint and several liability is removed from a leaving company. Section FM 5 appears as though it has a temporal qualification to it even though the intention of the drafter seems to have been to clarify at what... Finalised
159 EX 51(6) 22/06/2012 Section EX 51(6) of the Income Tax Act 2007 (ITA 07) provides the definition of “costs” for the purposes of the comparative value method formula used to calculate Foreign Investment Fund (FIF) income or loss from an attributing interest in a FIF.... Finalised
158 BG 1, GB 1, YA 1 11/02/2011 The omission of the words “to the extent that” changes the effect and operation of the general anti-avoidance provision (“GAAP”), being sections BG 1 and GB 1 of each of the Income Tax Act 1994, Income Tax Act 2004 and Income Tax Act 2007. Finalised
157 HA 31 26/03/2012 Under the 2004 (and previous acts the earliest date for a revocation was the first day of the income year in which it was provided to Inland Revenue. Under the 2007 version it is possible to backdate a revocation.  Thus it is possible to file a... Finalised
156 EI 7(2) and EI 8(2) 18/01/2012 Sections EI 6 and EI 7 of the ITA 2004 contain an unintended change in outcome that would permit a taxpayer to spread income in a disparate manner across a specified number of years later than the income year in which the income is derived. The... Finalised
155 EG 1 30/03/2011 Section EG 1 of the ITA 2004/2007 provides a concession that allows a taxpayer (in certain circumstances) to return foreign sourced income in a later income year than the year of its derivation. The section exists to reduce compliance costs and it... Finalised
154 FE 41(1), FG 2(3-5) 08/11/2011 Panel Recommendation: There appears to be an unintended change concerning section FE 41(1) which impacts how section FE 39 is applied throughout the subpart. Finalised
153 CD 40 14/09/2011 The taxation provision requiring the Commissioner to make amended assessments where a dividend is recovered by a company under section 56 of the Companies Act 1993 no longer requires the Commissioner to reverse any assessment made under the... Finalised
152 FM 8(3)(b)(ii) 06/04/2011 Section FM 8(3)(b)(ii) refers to two companies being ”group companies” for the whole term of the loan, whereas its predecessors required that the two companies were members of the ”same consolidated group”. Finalised
151 HC 25, HH 4(3) 11/07/2011 Section HC 25 taxes a non-resident trustee on a foreign sourced amount whether it is trustee income or beneficiary income. This is an unintended change from the original provision - section 228(3) ITA 76. Give examples: A, is the NZ resident settlor... Finalised
150 EC 05/04/2011 Subpart EC of the 2004 and 2007 Act have omitted to contain the "business requirement" previously contained in section EE 1 of the Income Tax Act 1994. Examples: Section EE 1 of the 1994 Act mandated a business nexus. The definition of trading stock... Finalised
149 OZ 5(1)(d), MJ 5(1) 14/12/2010 Apparent error in wording of section. Section should read "the amount paid on subscription for a unit is greater than the amount paid on redemption". It currently reads "less than". Purpose of section is to allow an ASC account to be established to... Finalised
148 HC 16 08/09/2010 Present ordering rules of HC 16 may have a retrospective effect in that a taxpayer who receives distribution from a foreign (or non-complying trust) subject to the rules may be taxable on accrued income derived before the person first became NZ... Finalised
147 BC 5, BC 7 08/11/2010 A company has a loss brought forward of say $100. The company has a breach of shareholding during the current year. The part-year accounts reveal a pre-breach profit of say $120, and a post-breach loss of say $70. The total net income for the year... Finalised
146 EG1, EP 1 09/09/2010 Can election in section EG 1 be applied to separate income sources - e.g. from different countries...give examples: if a taxpayer has two rental properties, which are in different countries, and both income sources would be eligible for the election... Finalised
145 RD 3, OB 2 13/07/2010 It appears as though a shareholder-employee that receives a salary with no PAYE deducted does not meet the definition of "employee" under the ITA 2007.  This is different from ITA 2004.  Therefore, any fringe benefits provided to these shareholder-... Finalised
144 EA 4(1), DF 5 25/05/2010 Clarification is required of when a deduction may be taken for a redundancy payment which is paid within 63 days of the balance date. Section s EA 1 of the Income Tax Act 2007 (the Act) allows a deduction for deferred payments of employment income (... Finalised
143 GC 5, GD 10 17/05/2010 The meaning of "a property" in section GC 5 of the Income Tax Act 2007. Your interpretation under the new Act 2007: Section GC 5 of the Income Tax Act 2007 (leases for inadequate rent) provides that the section applies when "a property is leased".... Finalised
142 HM 25 (was HL 4(2)) 12/05/2010 This submission has been submitted as there is a potential unintended legislative change in provisions that deal with the entity’s loss of the portfolio investment entity (“PIE”) status when certain eligibility requirements are not met. The... Finalised
141 DB 9(1), HG 9(3) 16/03/2010 The ITA 2007 does not appear to contain a specific provision for credits to the ICAs of transferee companies, or for the timing of such credits, when excess provisional tax is transferred between wholly-owned group companies under s RC 32 of the ITA... Finalised
140 YC 11(2) and (3), OD 5(6) 09/04/2010 Sections YC 11(2) and (3) of the Income Tax Act 2007 (Sections OD 5(6)(a) and (b) of both the Income Tax Act 2004 and the Income Tax Act 1994) set out exceptions from the requirement to trace ownership up to a natural person shareholder. Broadly,... Finalised
139 FE 12(1), FG 4(1) 27/04/2010 Section FE 13(1) of the Income Tax Act 2007 (the Act) allows a natural person, an excess debt entity, or a member of an entity's New Zealand Group or worldwide group a reduction in their debt percentage provided certain criteria is met.  However, as... Finalised
138 OB 67, ME 9(8) 12/04/2010 If further income tax (FIT) is payable under s OB 65 or s OB 66 of the Income Tax Act 2007, s OB 67 enables a reduction in further income tax as long as the company had a debit balance in their IC account in 'a tax year'. Effectively this reduction... Finalised
137 LJ 1(2), LC 1(1) 24/03/2010 Section LC 1(1) of the Income Tax Act 2004 (2004 Act) provides that: "LC 1(1) [Credit for tax paid overseas] Where a person who is resident in New Zealand derives assessable income from a country or territory outside New Zealand, income tax paid in... Finalised
136 EW 31(4), DB 11, DB 9 09/04/2010 Section EW 31(4) of the Income Tax Act 2007 provides that a deduction for negative base price adjustment expenditure is available under section DB 11. Section DB 11 provides that a deduction is available to the extent that income has previously been... Pending
135 RD 4(2), NC 16 06/04/2010 Section RD 4(2) of the Income Tax Act 2007 requires an employee to account for and pay PAYE to the Inland Revenue if the employer has not "withheld and paid" the PAYE (ie an employee must effectively account for and pay PAYE if the employer has not... Finalised
134 CE 1(1)(a) and (c), RD 5 (1) 12/03/2010 Under the Income Tax Act 1994 where an individual received accommodation in connection with their employment, and was maintaining a home elsewhere (occupied by family or left vacant), no amount was taxable to the employee. This was the case whether... Finalised
133 LJ 4, LJ 5(1), LJ 5(4) 15/10/2009 LJ 5(1) should not be just for calculating NZ tax on foreign income segments. The test threshold in LJ 5(4) is different from the older Acts. The purpose of the older version of LC 14 in the ITA 1994 was to apportion the NZ tax between all income... Finalised
132 FO 18, FE 10(2) (4) 27/11/2009 This submission sets out what we view as an unintended change in section FO 18 of the Income Tax Act 2007 ("2007 Act") arising from the rewrite of section FE 10(2) and (4) of the Income Tax Act ("2004"). These provisions relate to the tax treatment... Finalised
131 DT 9 22/10/2009 Section DT 9 of the Income Tax Act 2007 ("the 2007 Act") limits the amount of the deduction available for Petroleum Development Expenditure when a Petroleum Miner disposes of a Petroleum Mining Asset to an associated person. In terms of context, the... Finalised
130 IP 5, IG 2(5) 25/11/2009 This submission sets out what we view as an unintended law change resulting from the enactment of section IP 5 in the Income Tax Act 2007 ("2007 Act"). The change in law arises from the redraft of section IG 2(5) in the Income Tax Act 2004 ("2004... Finalised
129 OB 32(2)(b), ME 5(1)(e)(iii) 18/11/2009 Section OB 32(2)(b) of the Income Tax Act 2007 (the 2007 Act) states: "OB 32(2) NO DEBIT A debit under subsection (1) does not include - (b) a refund of income tax paid before a debit arises under section OB 41, but only to the extent to which the... Finalised
128 GB 25(3)(b), GD 5(a) 04/12/2009 Section GB 25(3)(b) of ITA2007 has narrower meaning than equivalents in ITA2004 and ITA1994. Give examples: Under the ITA2004 and ITA2007, the person could be involved at a lower level than management; perhaps in more of an accounting or clerical... Finalised
127 CB 33, DV19, HE 20/08/2009 A submission received from Professor Prebble considers that section CB 33 of the 2007 Act contains an unintended change in law, in that it no longer completely overrides the principle of mutuality in relation to the amounts derived by an association... Finalised
126 OE 8, MF 5(7), (8) 23/12/2009 Section OE 8 produces a different outcome from that given by the corresponding provision of the 2004 Act (section MF 5(7), (8)). In addition, as section OE 7 and section OE 8 overlap, section OE 8 appears unnecessary. Section OE 7(6) to (8) provides... Finalised
125 LE 1, LE5, LE 8 09/11/2009 Restrictions on imputation credits attached to trust distributions sourced from dividends Give examples: Trustee derives a fully imputed cash dividend, 70 cash 30 credits, which will be passed through to the sole beneficiary (an individual) after... Finalised
124 IC 12, IG 2(6) 16/10/2009 This submission sets out what we view as an unintended law change resulting from the enactment of section IC 12 in the Income Tax Act 2007 ("2007 Act"). The change in law arises from the redraft of section IG 2(6) in the Income Tax Act 2004 ("2004... Finalised
123 IC 3(3), IG 1(5)(a)(ii) 06/10/2009 It appears that in the ITA 2007 the test measuring common voting interests may have been modified from the test under the ITA 2004. Your interpretation under the new Act 2007: Under section IC 3(3) of the ITA 2007, if the percentage interests in the... Finalised
122 CD 39(9)(c), CD 39(9)(b) 14/10/2009 Dividends with nil RWT or NRWT to pay could be included as a backdated repayment Concept of "income" is much larger than concept of "gross income" in the ITA 1994 Concept of "income" is much larger than concept of "gross income" in ITA 1994 Finalised
121 CE 1, YA 1 02/11/2009 Do amounts listed in CE 1 [amounts derived in connection with employment] apply to independent contractors receiving schedular payments? Give examples: A self employed farm contractor provided with free board. Farmer as the employer must deduct... Finalised
119 EJ 16 30/09/2009 Section EJ 16 of the Income Tax Act 2007 limits the amount of the deduction available for Petroleum Development Expenditure to a Petroleum Miner when the Petroleum Miner disposes a Petroleum Mining Asset to an associated person. In terms of context... Finalised
118 FM 12(2), HB 2(1)(d) 12/08/2009 There appears to have been an unintended change in the Income Tax Act 2007 in relation to the deductibility of interest expenditure for a company that belongs to a consolidated group. Company A and Company X are both qualifying companies and members... Finalised
117 CB 30, CB 26, EQ 1(1) 16/07/2009 A number of provisions in the Income Tax Act 2004 are subject to limitations or qualifications found in amending Acts. These have not been reproduced for the Income Act 2007. Give examples: Another example where an amending Act qualifies a section... Finalised
116 LP 10(1), LE 4(2) 16/07/2009 Section LP 10(1) of the Income Tax Act 2007 (ITA 2007) provides the formula for the calculation of the annual total deduction that a supplementary dividend holding company can allocate to an income year. Under the ITA 2004 the maximum deduction is... Finalised
115 HC 24(2)(a), HH 4(2)(a) 21/07/2009 Section HC 24(2) seems to attempt to deny a trustee a tax credit arising under Parts L or M of the Act (e.g. imputation credits (IC)) in "determining" its individual tax liability in respect of trustee income (notwithstanding that tax credits are... Finalised
114 LF 8(1), LD 9(1) 07/07/2009 LF 8(1) of the ITA 2007 does not allow for FDP credits to be refundable to tax exempt shareholders (despite referring to exempt shareholders in the title and in OC 1(6)). The equivalent provision in the 2004 Act, LD 9(1), did allow tax exempt... Finalised
113 OB 6, ME 41(1)(ad) 14/07/2009 A transfer of an amount in a tax pooling account of a company taxpayer no longer results in credit to the company's imputation credit account at the time of then transfer. Finalised
112 HA 1(1)(a), HA 11(4), HA 14(3), HA 22, HA 24(5), HA 26 06/03/2009 This submission sets out what we view as unintended changes to the qualifying company regime in sub-part HA of the Income Tax Act 2007 ('2007 Act") arising from the rewrite of sub-part HG, the equivalent sub-part, in the Income Tax Act 2004 ("2004... Finalised
111 EX 1(1)(b) 19/06/2009 The definitions of a controlled foreign company (CFC) included in the 2004 and 2007 Income Tax Acts (ITA) are different to the definition included in the 1994 ITA. In summary, under the 1994 ITA a foreign company is not a CFC where the control... Finalised
110 EE 60(3)(b), EE 51(3)(b), OB 1 06/06/2009 Wording in the 2004 and 2007 Acts for the theoretical "total deductions" does not reflect amended 1994 Act. Give examples: If asset is unavailable for any use for a period (e.g. business has ceased, asset in storage pending start of new business),... Finalised
108 YA 1, OB 1 15/06/2009 The definition of "revenue account property" in the Income Tax Act 1994 (1994 Act) states: "revenue account property" means . property in respect of which any amount derived on disposition would be gross income of the person other than under section... Finalised
107 24M(5) 15/06/2009 Section 24M(5) of the Tax Administration Act (TAA) 1994 provides that:  "24M Exemption certificates for schedular payments... (5) An exemption certificate must not be altered or be used to cause a person making a schedular payment not to withhold an... Finalised
106 EX 32(1)(f), EX 33D(1)(d) 15/06/2009 Under section EX 33D(1)(d) of the Income Tax Act (ITA) 2004, a person's rights in a FIF in an income year are not an attributing interest if, at all times in the year when the unit trust makes a distribution to investors, there is an RWT proxy under... Finalised
105 CX 17(4), CX 16(4) 30/04/2009 Section CX 16(4)(a) of the Income Tax Act 2004 had "and" replaced with ":". When the section had "; and" it meant that both subparagphs (a) and (b) needed to be satisfied. By replacing "; and" with ":" means that only one of paragraphs (a) or (b)... Finalised
104 EX 52, EX 44c(1) 17/06/2009 S EX 52(2) appears to calculate FDR income on a line by line basis rather than a pooled basis. Although S EX 52(2) refers to "total FIF income" and attributing interests", it only refers to "the FIF" rather than all FIFs. This can be contrasted with... Finalised
102 RE 22, NF 5 23/04/2009 Section NF 5 of the 1994 and 2004 Acts contained a "reasonable grounds" defence for a person who failed to deduct RWT from a payment. If the person believed on reasonable grounds having made reasonable inquiries that the payee was non-resident, then... Finalised
101 HA 21, HG 11(3) 13/02/2009 Section HA 21 states that in an income year in which a non-QC company becomes a QC, "subparts IA and IQ (which relate to the treatment of foreign losses) do not apply to carry forward a loss balance of the company." On becoming a QC, pre-existing... Finalised
100 HC 6(1), OB 1 30/03/2009 Section HC 6(1) of the ITA 2007 requires income to be "paid" to a beneficiary within 6 months, whereas section OB 1 "beneficiary income" in the ITA 2004 stated "pays or applies" which appears to be a substantial change. We note that "paid" is not... Finalised
99 HC 27, HC 28, HH 1(1) 30/03/2009 Section HH 1(1) of the ITA 2004 contained an exception for settlements of nominal amounts made by a person ("first person") at the request of another person ("nominal settlor exception"). Effectively the person who settled the amount would not be... Finalised
98 CD 33 18/02/2009 The related party capital gain restriction in the Income Tax Act 2004 could apply in respect of a third party capital gain amount distributed by a company to its shareholders upon liquidation. Consequently, a third party transaction capital gain... Finalised
97 MB 4, KD 1(g) 10/08/2008 An adjustment is required to be made to a taxpayers family scheme income for Working for Families Tax Credits if they are a major shareholder in a close company. Under the 2004 Act this adjustment is calculated as the major shareholders voting... Finalised
96 OB 41, ME 5(1)(i), ME 5(2)(h) 20/03/2009 Under the rewritten legislation it appears the debit to a company's ICA on a breach of shareholder continuity is equal to the company's ICA balance the day before the breach. This leads to a nonsense result where a company pays a fully imputed... Finalised
95 EX 21(26), CG 11(19) 22/01/2009 Section EX21(26) of the Income Tax Act 2007 ("ITA 2007") outlines the branch equivalent ("BE") income or loss for a controlled foreign company ("CFC") carrying on business of providing life insurance. The following discussion outlines our... Finalised
94 HR 8, FC 24 17/11/2008 This submission relates to the election not to be a transitional resident under section HR 8 of the Income Tax Act 2007. The Income Tax Act 2007 does not seem to provide for an election by way of giving a notice of election, as was previously... Finalised
93 RD 17, NC 2(5) 10/12/2008 Unintended change in method used to calculate PAYE on "extra pay" The employer is required to calculate the annualised value of all PAYE income payments first of all by grossing up income by including all payments received for the 4 weeks before and... Finalised
92 RD 8(1)(b)(iii), YA 1 18/11/2008 The application of the schedular payment rules to a "agricultural, horticultural or viticultural company" has been widened under the Income Tax Act 2007 to include any company providing any services in relation to any agricultural, horticultural or... Finalised
91 DC 13(5)(d), DC 12(5)(d), DF 7(2)(h)(iii) 15/10/2008 There appears to be an unintended change in the employee share purchase scheme rules relating to the requirements for shares held on trust. Section DC 13(5)(d) of the Income Tax Act 2007 (Section DC 12(5)(d) of the Income Tax Act 2004) requires the... Finalised
90 IQ 1, IQ 2, IA 2(5), IA 7, IA 7(5), IE 3(1), IE 1 15/10/2008 The ability to carry forward an attributed CFC net loss is in doubt as the general rules do not appear to apply. Finalised
89 HA 11(5)(b), OB 3(3A)(b) 15/10/2008 Section HA 11(5)(b) of the Income Tax Act 2007 does not seem to require that the dividends be vested or distributed as beneficiary income after a company attained qualifying company status, as was previously required under section OB 3(3A)(b) of the... Finalised
88 GB 1(3), YA 1, OB 1 18/09/2008 This submission address what we consider is an unintended change in section GB 1(3), and the definition of "dividend" in section YA 1, of the Income Tax Act 2007 ("2007 Act"). This has arisen from the rewrite of section GB 1(3), and the definition... Finalised
87 OB 13, OB 71, ME 9B 19/06/2008 Sections OB 13 and OB 71 of the Income Tax Act 2007 ('2007 Act") arising the redraft of section ME 9B, the equivalent provision, in the Income Tax Act 2004 ('2004 Act"). Finalised
86 FE 36, FG 8C 10/09/2008 This submission set out what we view as an unintended legislative change in section FE 36 of the Income Tax Act 2007 ("2007 Act") arising from the redraft of section FG 8C, the equivalent provision in the Income Tax Act 2004 ('2004 Act"). The... Finalised
85 LP 4, LE 2(5) 09/09/2008 Section LP 4 of the Income Tax Act 2007 which deals with continuity rules for carrying forward credits in respect of dividends paid to non-resident investors appears to have changed. Section LP 4(2) does not seem to require a market value... Finalised
84 RF 2(5), NG 4 20/08/2008 Section RF 2(5) omits the reference to non-literary royalties that was in section NG 4 of the 2004 Act. As a result, NRWT is no longer a minimum tax on such royalties. Finalised
83 RD 2(1)(e) 25/08/2008 Section RD 2(1) defines "PAYE rules". Subsection 1(e) refers to "sections 15C to 15M, . of the Tax Administration Act 1994". In fact, sections 15C to 15E do not exist.  This appears to be a drafting issue rather than an unintended change. Finalised
82 OD 16(3), MI 5(1)(e) 04/08/2008 This submission is made in respect of an unintended law change resulting from the enactment of the Income Tax Act 2007 ("2007 Act"). The unintended change in law arises due a reference to '34% or more" in the 2007 Act, instead of "34 or more... Finalised
81 IP, IG 2(4) 19/08/2008 Part-year grouping of losses between companies has been restricted to situations where shareholder commonality is lost during an income year rather than either lost or gained as per the 2004 Act. Finalised
80 CC 9(1)(2), Schedule 51 18/08/2008 The new definitions of 'natural resource' and 'land' result in an unintended change in the application of the royalty rules. Finalised
79 RD 3(3), RD 3(4), OB 2 2(d) 25/07/2008 Section RD 3(3) and 3(4) of the 2007 Act refer to a person choosing whether an amount paid to them in the income year is or is not a payment of PAYE income. These sections refer to "an amount" paid to them. Section OB 2 of the 2004 Act at para 2(c)... Finalised
78 RE 2(1), NF 1(2) 22/07/2008 RWT cannot be deducted from interest paid to non-residents with a New Zealand fixed establishment. Finalised
77 ME 14(6)(b)(i) 16/07/2008 Section ME 14(6)(b)(i) ITA 2004: An equivalent to section ME 14(6)(b)(i) does not seems to appear in the ITA 2007. Finalised
76 YA 1, OB 1 15/07/2008 Changes to the definitions of an employee and an employer under the re-written 2007 Income Tax Act as a consequence of a taxpayer query. I have found that the subsections (c)(ii) of the definitions of employee and employer now exclude from the FBT... Finalised
75 HA 7(3)(c)(ii), OB 3(3)(d)(i) 08/07/2008 Section HA 7(3)(c)(ii) of the 2007 Act refers to "... the group who derived beneficiary income from dividends from the qualifying company" whereas section OB 3(3)(d)(i) of the income Tax Act 2004 referred to "...the persons who ... derived from the... Finalised
74 YA 1, OB 1 27/06/2008 In comparing the definition of "money lent" in the ITA 2004 with the definition of "money lent" contained in the ITA 1994, we noticed that paragraphs (a), (c) and (d) of the ITA 2004 definition all refer to "an amount of money", whereas paragraph (b... Finalised
73 YA 1, HC 27, HC 7 (3), OB 1 27/06/2008 The new definition of settlor in section HC 27 results in an unintended change for the trust rules. Finalised
72 YA 1, NF, OB 1, NF 27/06/2008 Under section RE 3 of the 2007 Act, RWT is still required to be deducted even where the recipient holds a certificate of exemption. Finalised
71 24P, NC 15(3) 05/06/2008 Inconsistency between s NC 15(3) of the Income Tax Act 2004 and the listed corresponding provision - s 24P of the Tax Administration Act 1994. Finalised
70 FE 6(1A) 05/06/2008 It is not clear in the 2007 Act that under a resident's restricted amalgamation (formerly a "qualifying amalgamation") an amalgmating company does not derive income (or have any deductions)on the transfer of property. Further, the wording of section... Finalised
69 DU 12(3)(b), DN 3(3)(b) 07/07/2008 The submission relates to the section DN 3(3) (b) in the ITA 1994. That section allowed a deduction for the "aggregate amount" of exploration and development expenditure incurred "before the end of that year", (less all deductions allowed by the... Finalised
68 RF 7 to RF 12, Schedule 52, NG 2(1) 03/07/2008 The 2007 Act does not include a corresponding provision to that under the 2004 Act deeming the rate of non-resident withholding tax (NRWT) to be zero % where the non-resident withholding income consists of fully imputed non-cash dividends.... Finalised
67 YA 1, OB 1 04/06/2008 Incorrect use of drafting convention in the definition of shares of the same class. Submitters interpretation under the new Act 2007: Two or more shares are 'shares of the same class' where paragraphs (a), (b) and (c) of that definition are met. ... Finalised
66 YD 1(7), OE 1(5) 03/06/2008 The circumstances where a Government servant not physically in NZ will be deemed to be physically in NZ for purposes of the presence test in the residence definition seems to have been narrowed. Finalised
65 LJ 5(5), LJ 5(6), LC 14(4) 03/06/2008 The formula for calculating a person's notional income tax liability in section LJ 5(5) of the 2007 Act is not the same as the formula for calculating that amount under the 2004 Act. In particular, the word losses in section LJ 5(6) either refers to... Finalised
64 RA 15(2)(c), NH 3(1) 28/05/2008 Foreign dividend payments (FDPs) appear to fall within the concession extending the due date for last quarter payments to 31 May.  This is not an identified change. Section RA 6(3) provides that where a company receives a foreign dividend it must... Finalised
63 OB 1(2)(a)(i), ME 1(2)(a) 14/05/2008 This submission is that apart from the exception for Australian resident companies in subsection (3), a company that is resident in New Zealand which is also resident in another country is excluded from maintaining an ICA under section OB 1(2) of... Finalised
62 EE 21, EG 11 10/04/2008 1994 Act - EG 11 provides that the number of months relevant to the calculation of the depreciation loss in relation to a pool of assets is limited to the number of months in the taxpayer's Income year. 2004 Act - EE 21 Provides for the same formula... Finalised
61 CD 17(4), CD 15(1) 06/08/2007 The reduction in ASC that results from a treasury stock acquisition when shares are held more than 12 months or cancelled within 12 months will result in the ASC of a company being reduced to zero under above sections. Finalised
60 CZ 6 05/09/2005 The marginal note in section CZ 6 of the 2004 Act "Commercial bills before 31 July 1986" implies that sCZ6 has no application to commercial bills after that date. Finalised
59 EY 8, EY 9, Schedule 22A 23/03/2006 The definitions of "Life insurance policy" and "life insurance" have changed. The ability to apportion has been created in sEY9, and the phrase "Whereby and to the extent that" has been removed from sEY8. Finalised
58 CD 3-5, CD 27, CF 2(1)(g) 21/06/2007 The buy-back of shares by a company was, under the 1994 Act, expressly a dividend unless the buy back came within one of the specified exclusions. While we have not found anything to suggest that there has been a change of policy, when read... Finalised
57 OB 1, CD 34(1)(b), CQ 2(1)(e), EX 1, EX 8-13, EX 14, EX 15, EX 21(17), EX 29, EX 32, LF 1(2)(b), LF 2 (2)(b) 29/05/2007 There are unintended legislative changes arising from the way the "income interest of 10% or greater" test in the Income Tax Act 1994 is applied in the Income Tax Act 2004. Finalised
56 CW 35 04/05/2007 Section CW 35 of the 2004 Act and section CB 4(1)(e) of the 1994 Act result in a different tax treatment for charitable trusts, societies or organisations that carry on business. For business income to be exempt, the 2004 Act requires that the trust... Finalised
55 CT 5, DT 20, OB 1 26/02/2007 There has been an unintended legislative change in respect of the definition of "petroleum mining operations" in section OB 1 of the Income Tax Act 2004 by not including the phrase "and all activities carried out in connection with prospecting or... Finalised
54 EX 13, EX 31 06/12/2006 Partnerships and FIF rules - section EX 31 ITA 2004 determines what is a direct interest in a foreign investment fund (FIF). Under the ITA 1994 FIF interests were determined in accordance with the CFC direct income interest rules in section CG 5. Finalised
53 DB 3 06/12/2006 The capital limitation rule - section DB 3(1) ITA 2004 provides that a taxpayer is allowed a deduction for expenditure incurred in connection with determining their income tax liabilities. Finalised
51 DC 9 (1)(2)(3)(4) 09/08/2006 Deductibility of excess monetary remuneration provisions. Finalised
49 DO 6(2)(c), DO 6(3)(c), DP 3(2)(c), DP 3(3)(c) 31/03/2006 Black hole expenditure. Amortisation of aquaculture and forestry development expenditure. Finalised
48 CB 11(1) 23/03/2006 The omission of the words "to the extent" from section CB 11(1), together with the ammendment to the "land" definition in section OB 1, have the effect of unintentionally widening the ambit of amounts that are taxed under section CB 11. Finalised
47 61(1) 13/03/2006 A possible unintended change results in the enactment of the Income Tax Act 2004. The possible change in law arises because section 61(1) of the Tax Administration Act 1994 has not been updated to reflect terminology used in the 2004 Act. Finalised
46 OB 1 13/03/2006 A possible unintended change results in the enactment of the Income Tax Act 2004. The possible change in law concerns the definition of "market value circumstance" in section OB 1. Finalised
45 CE 2 01/12/2005 Section CH 2 of the Income Tax Act 1994 includes within monetary remuneration any benefit conferred on any taxpayer in respect of, or in relation to, or in the course of, or by virtue of, the taxpayer's employment or service or future employment or... Finalised
44 ED 1(5) 22/11/2005 Deducting the cost of worthless excepted financial arrangements which are revenue account property. Finalised
43 EX 36 19/10/2005 Section EX 36(1) "to the extent to which" should be replaced with "if", unless the section is intended to have an "apportionment" context or application rather than simply apply in an absolute manner. For example, consider a FIF interest which has... Finalised
42 NG 1(2) 13/10/2005 Section NG 1(2) provides that the NRWT rules apply to income deemed under the Act to be derived from New Zealand and consisting of certain types of income (essentially dividends, royalties and interest). This appears to be an unintended change from... Finalised
41 LD 22/09/2005 References to "income year" have been replaced with "tax year" which have different defined meanings. In Part LD this results in unintended changes (and may lead to withholding of credits by the Commissioner). Finalised
40 CB 5, CB 6, CB 7, CB 8, CB 9, CB 10, OD 8(4) 16/09/2005 The taxing provisions of CB make reference to the gross income of a person such as CB 6(1)(a)(i) "at the time person A acquired the land they." The definitions of taxpayer and person remain the same as those of the 1994 Act. A taxpayer is defined in... Finalised
39 CG 4 07/09/2005 Section CG 4 of the Income Tax Act 2004 treats as income amounts recovered when "the person recovers some or all of the expenditure or loss, whether through insurance, indemnity, or otherwise". Finalised
38 CB 11(1)(iv) 05/09/2005 The last item in the list of Section CB 11(1)(iv), 'roading', contains a trailing comma unlike previous legislation where the comma on the last list item is absent. The effect of this extra comma is that the nexus with major projects is severed and... Finalised
37 CD 9 05/09/2005 The submission sets out an unintended change in section CD 9 of the Income Tax Act 2004 ("2004 Act") arising from the redraft of section CF 6(1), the equivalent provision, in the Income Tax Act 1994 ("1994 Act"). The section in each Act sets out the... Finalised
36 DC 9(2) 06/09/2005 Section DC 9(2) of the Income Tax Act 2004 provides that, if the seller and buyer are not associated persons at the time of the sale, (a) the seller is allowed a deduction, in the income year of the sale, for any part of the amount that remains... Finalised
35 EY 8 23/08/2005 Under the 1994 Act, accidental death cover is treated as life insurance, unless it is accident or medical insurance and contingent upon death from a specified cause. Changes in the 2004 Act have removed the requirement that accidental death cover be... Finalised
34 CE 2 22/08/2005 Section CE2 has been omitted. From 1916 has been the main assessment section for farmers. Apart from 1916 Act since the 1900 Land and Income Tax Act all business and farming and timber incomes have always been separately assessed. After the Great... Finalised
33 CB 11(1) 15/08/2005 The issue described in submission number 008 also arises in relation to major projects involving the development of land that is to be retained after the completion of the development as a long term rental investment. Finalised
32 OD 5(6F) 11/08/2005 Section OD 5(6F) of the Income Tax Act 2004 refers to sections OD 3(3)(b) and OD 4(3)(b) and (d) which have been omitted from the 2004 Act. Finalised
31 DE 2(1) 11/08/2005 Unintended change in DE 2(1). This section states depreciation is deductible for expenditure OR depreciation for business motor vehicles. This is a change from the 1994 Act where BOTH could be claimed. Finalised
30 BB 2, LD 7, MB 2, OB 1 02/08/2005 The Income Tax Act 2004's reference to 'tax year' in section BB 2(3), section LD 7, subpart MB and in the definition of 'provisional taxpayer' in section OB 1 results in an unintended change. The sections should refer to 'income year'. Finalised
29 KH 1(1) 29/07/2005 - Withdrawn
28 HH 1(7) 29/07/2005 The reference to the entire definition of corpus in Section HH 1(7) of the 2004 Act results in any settlement on a trust being deemed to be income of the trustee. Previously this was limited to specified settlements which give rise to a tax... Finalised
27 FC 21 28/07/2005 Non Resident Film Renters and Non resident person. "A New Zealand company that is under the control of persons who are not deemed to be a resident in NZ" in section CN2(1) and section CN2(4) in the ITA 1994 have been omitted from section FC 21 in... Finalised
26 OB 1 21/07/2005 The reference in paragraph (a)(ii) of the definition of "qualifying trust" to section BD 1(2) should be to section BD 1(4). Finalised
25 FE 6(5) and (6), FE 7(1) and (2) 20/07/2005 The Income Tax Act 2004's reference to 'tax year' in sections FE 6(5) and (6) and sections FE 7(1) and (2) results in an unintended change. The sections should refer to 'income year'. Finalised
24 FE 5, EE 33, EE 34 19/07/2005 Under the ITA 1994, section FE 5(1) provided that property transferred pursuant to a non-qualifying amalgamation was deemed to be transferred for consideration equal to the market value of the property. The exception to this was where the property... Finalised
23 DR 2(4), EY 46 14/07/2005 Section DR 2(4) refers to subsection EY 46(6) which does not exist. Section DR 2(4) should refer to section EY 46 (3) which provides that the life insurer is allowed the deduction in the income year in which they dispose of the property. In the 1994... Finalised
22 OB 1 12/07/2005 An unintended change arises in respect of the definition of "shares of the same class" in Section OB 1 of the Income Tax Act 2004. The key difference between the two definitions above is that the 2004 Act omits "; and" which links paragraphs (a) and... Finalised
21 DB 36 30/06/2005 Under the 1994 Act deductions are denied for bribes paid to all public officials (whether the official is a New Zealand or a foreign public official). Under the 2004 Act deductions are denied for bribes paid to New Zealand officials. However,... Finalised
20 EZ 35(3), DA 1, DA 2, DA 3 25/05/2005 Section EZ 35(3) deems a negative amount arising under a BPA to be a "deduction" of the holder. Section DA 3(6) states that no provision in part E supplements the general permission or overrides the general permission or a general limitation. This... Finalised
19 Part Y 24/05/2005 The omission from Part Y of a savings provision for certain sections of the Income Tax Act 1976 results in an unintended change. Section 156F of the Income Tax Act 1976 allowed, up to the end of the 1990 income year, export market development... Finalised
18 CD 32(15)(b) 24/05/2005 The provision in the 1994 Act limiting the subscriptions amount of available subscribed capital ("ASC") of an amalgamated company resulting from a long-form amalgamation to the aggregate ASC of the amalgamating companies has been omitted from the... Finalised
17 EC 48(1)(a) 29/04/2005 Bloodstock breeding The new requirement to apply the sale proceeds directly to the purchase of replacement bloodstock adds another level of unnecessary complexity to the administration of the taxpayer and requires a direct application of sale... Finalised
16 CE 1 29/04/2005 The definition of monetary remuneration in relation to the provision of accommodation has been narrowed from including 'board or lodging, or the use of a house or quarters..' to 'the market value of board...'. The normal definition of board is much... Finalised
15 CB 6(1)(c), CB 9(1), CB 9(2) 26/04/2005 The omission of the minor nature clause from CB 6(1)(c) and CB 9(1) and (2) results in an unintended change. The implication of the removal of this reference to work of a minor nature is that the 2004 act now taxes a larger number of land sales than... Finalised
14 CB 9(1)(b) 20/04/2005 Under the 1994 Act (CD1(2)(d)), the test of whether or not a person is in business as a builder is applied at the time the land was acquired. Under the 2004 Act (CB9(a)(b)), the test of whether the person is in business as a builder is applied at... Finalised
13 CB 14(2) 18/04/2005 Section CD 1(3)(b) of the ITA 1994 excluded: "Any land, being a dwellinghouse." Section CB 14(2) of the ITA 2004 states the exclusion applies to: ".the land that has the dwellinghouse on it." In CD 1(3)(b) of the ITA 1994 it was clear the land that... Finalised
12 CD 33 18/04/2005 1. s CD 33 does not specify application of "capital gain amount": should it link to defn of "capital gains"? 2. Ss (7)(b): should be cap gain incl gift - like '94 s CF(7)(b) - so capital compensation (van den berghs case) and insurance included as... Finalised
11 OB 1 08/04/2005 The amended definition of "beneficiary income" prevents any accrual income derived by a trustee (including for example ordinary interest income) from being beneficiary income. It should only prevent forgiveness of debt income arising under section... Finalised
10 OB 1 06/04/2005 The ITA 2004 no longer includes, in section OB 1, a general definition of "person".  Under the ITA 1994, "person" was defined to include "a company and a local or public authority; and also includes an unincorporated body of persons:". The ITA 2004... Finalised
9 DO 4 01/04/2005 The new Section DO 4 prohibits further deductions for any unamortised balance of capitalised development expenditure where the original expenditure was incurred prior to the 1995-96 income year - Refer Sections DO 4(2)(d) and 3(d). The new Section... Finalised
8 CB 11(1), CD 1(2)(g) 18/03/2005 Section CB 11(1) of the Income Tax Act 2004 states that: An amount that a person derives from disposing of land is income of the person if - (a) the amount is not income under any of sections CB5 to CB 10 and CB 12; and (b) the amount is derived in... Finalised
7 CB 9 16/02/2005 In particular land sales and being associated with a person in the business of erecting buildings. Example: Trust is set up for Mum, Dad (neither in the property game nor in the business of erecting buildings) and children. Trust buys rental... Finalised
6 EH 37, EH 81 02/02/2005 Unintended change in the definition of "specified period" for the purposes of the income equalisation schemes : taxpayers' balance date is no longer relevant to the determination of the "specified period". Finalised
5 EI 6 28/01/2005 The timeframe for giving notice to the CIR to spread income (e.g. payment of goodwill) is unclear in the 2004 Act. The 1994 Act provides for the person to make the request " during the next succeeding year " where as the 2004 Act states "the person... Finalised
4 LE 3 23/12/2004 This potential unintended change was created by the amendment to the wording of clause LE 3(3)(e) made by the Select Committee when it reviewed (what is now) the New Act. The Select Committee altered clause LE 3(3)(e) from saying ". unless sections... Finalised
3 CD 14 22/12/2004 Section CF 3 1994 Act, CD 14 2004 Act Section CF 3 (1)(b), when dealing with the carve out for returns of capital by companies, applies to cancellations of shares in whole but not in part. It seems that the reference to cancellation (in whole but... Finalised
2 EH 3 26/11/2004 Under the 1994 Act a partnership cannot make a deposit to the income equalisation scheme. My interpretation of the wording in the 2004 Act will allow a partnership to make a deposit to the scheme. Finalised
1 OB 1 14/10/2004 The submission is that the time period for making distributions from trusts as “beneficiary income” has been changed from a period ending on 30 September to a period that ends 6 months after the end of the income year (which is the accounting period... Finalised