HA 6 Corporate requirements
Requirements

(1)

A qualifying company must, in an income year,—

(a)

have 5 or fewer shareholders who meet the requirements of section HA 7; or

(b)

be a flat-owning company.

Exclusions

(2)

A company is not eligible to be a qualifying company if, at any time in an income year, it is—

(a)

a company that is not resident in New Zealand; or

(b)

a company that is resident in New Zealand but is treated under and for the purposes of a double tax agreement, as not resident in New Zealand; or

(c)
[Repealed]

Exclusion: loss of continuity

(3)

A company is not eligible to be a qualifying company unless, at all times in an income year, a group of persons holds for the QC continuity period, minimum QC interests in the company that add up to at least 50%.

Exception for close relatives

(4)

For the purposes of subsection (3), a share transferred by a transferor to a close relative is treated as being held by a single notional person for the company from the time that the transferor acquired the share. A share subsequently transferred to a close relative of a subsequent transferor is similarly treated as held by the same single notional person.

Some definitions

(5)

In this section—

minimum QC interest, for a person and the QC continuity period, means the lowest voting interest or market value interest they have in the company during the QC continuity period

QC continuity period means the period starting on the day that the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 receives the Royal assent and ending on the last day in the income year.

Defined in this Act: close relative, company, double tax agreement, flat-owning company, income year, market value interest, minimum QC interest, QC continuity period, qualifying company, resident in New Zealand, shareholder, voting interest

Compare: 2004 No 35 ss HG 1(a), (b), OB 1 “foreign company”, OB 3(1)(a), (b), (g)

Section HA 6(2)(c): repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section HA 6(3) heading: inserted, on 1 April 2017 (applying for the 2017–18 and later income years), by section 123(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6(3): inserted, on 1 April 2017 (applying for the 2017–18 and later income years), by section 123(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6(4) heading: inserted, on 1 April 2017 (applying for the 2017–18 and later income years), by section 123(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6(4): inserted, on 1 April 2017 (applying for the 2017–18 and later income years), by section 123(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6(5) heading: inserted, on 1 April 2017 (applying for the 2017–18 and later income years), by section 123(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6(5): inserted, on 1 April 2017 (applying for the 2017–18 and later income years), by section 123(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6 list of defined terms close relative: inserted, on 1 April 2017, by section 123(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6 list of defined terms LAQC: repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section HA 6 list of defined terms market value interest: inserted, on 1 April 2017, by section 123(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6 list of defined terms minimum QC interest: inserted, on 1 April 2017, by section 123(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6 list of defined terms QC continuity period: inserted, on 1 April 2017, by section 123(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section HA 6 list of defined terms voting interest: inserted, on 1 April 2017, by section 123(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).