GB 32 Benefits provided to employee’s associates
When this section applies

(1)

This section applies when—

(a)

a benefit is provided to a person who is associated with an employee of an employer; and

(b)

the benefit would be a fringe benefit if provided to the employee; and

(c)

the benefit is provided either by the employer or by another person under an arrangement with the employer for providing the benefit; and

(d)

the exemptions in subsections (2) and (2B) do not apply.

Exemption for shareholder-employees and corporate associates

(2)

Subsection (3) does not apply when—

(a)

the benefit is provided by an employer that is a company; and

(b)

the employee is a shareholder in the company; and

(c)

the person associated with the employee is a company; and

(d)

the benefit is not provided under an arrangement that has a purpose of providing the benefit either—

(i)

in place of employment income; or

(ii)

free from fringe benefit tax.

Exemption for LTCs and partnerships

(2B)

Subsection (3) does not apply when—

(a)

the benefit is provided by an employer that is—

(i)

a look-through company (an LTC):

(ii)

a partnership or limited partnership; and

(b)

the person associated with the employee, described in subsection (1)(a), is—

(i)

an owner of the relevant LTC:

(ii)

a partner of the relevant partnership or limited partnership.

Benefit treated as provided to employee

(3)

For the purposes of the FBT rules, the benefit is treated as provided by the employer to the employee.

Application of section CX 18

(4)

Section CX 18 (Benefits provided to associates of both employees and shareholders) applies to determine when a benefit provided to an associate of both an employee and a shareholder is treated as a fringe benefit and not a dividend.

Defined in this Act: arrangement, associated person, company, dividend, employee, employer, employment income, FBT rules, fringe benefit, fringe benefit tax, limited partnership, LTC, partner, partnership

Compare: 2004 No 35 s GC 15(1)–(3)

Section GB 32(1)(d): amended, on 2 November 2012, by section 74(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section GB 32(2B) heading: inserted, on 2 November 2012, by section 74(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section GB 32(2B): inserted, on 2 November 2012, by section 74(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section GB 32(2B)(a)(i): replaced (with effect on 2 November 2012), on 27 February 2014, by section 79 of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).

Section GB 32 list of defined terms limited partnership: inserted, on 2 November 2012, by section 74(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section GB 32 list of defined terms LTC: inserted, on 2 November 2012, by section 74(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section GB 32 list of defined terms partner: inserted, on 2 November 2012, by section 74(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section GB 32 list of defined terms partnership: inserted, on 2 November 2012, by section 74(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).