RD 36 Repayment of employment-related loans
Repayment at start of tax year

(1)

For the purposes of sections RD 34 and RD 35, an amount of income of an employee applied in an income year to repay an employment-related loan provided to the employee is treated as applied towards repayment on the first day of the income year or, if the date of the advance of the loan falls after that day, the later date.

Limitation

(2)

Subsection (1) applies only when an employee derives income that—

(a)

is salary or wages, an extra pay, a dividend, or interest; and

(b)

the amount payable by the company is—

(i)

payable without any amount of tax being withheld and paid under the PAYE rules, the RWT rules, or the NRWT rules:

(ii)

a fully-imputed dividend; and

(c)

is income of the employee in the tax year in which it is applied to repay the loan, or in an earlier income year.

Amounts derived and applied in different tax years

(3)

Subsection (4) applies when an employee derives income that—

(a)

is applied to repay an employment-related loan; and

(b)

relates to an income year after the income year in which it is applied to repay the loan.

Treatment of amount

(4)

The employee may treat the amount as derived in the earlier income year, but must notify the Commissioner of their decision within the time allowed to the employer for providing a return of income for the income year, or a longer time if the Commissioner allows.

Defined in this Act: amount, amount of tax, Commissioner, dividend, employee, employer, employment-related loan, extra pay, fully-imputed dividend, income, income year, interest, notify, NRWT rules, pay, PAYE rules, return of income, RWT rules, salary or wages, tax year

Compare: 2004 No 35 s ND 1E

Section RD 36(2)(b): replaced (with effect on 1 April 2008), on 30 March 2017, by section 264(1) (and see section 264(3)) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section RD 36 list of defined terms amount of tax: inserted (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 36 list of defined terms fully-imputed dividend: inserted (with effect on 1 April 2008), on 30 March 2017, by section 264(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section RD 36 list of defined terms non-resident passive income: amended (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 36 list of defined terms NRWT rules: inserted (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 36 list of defined terms resident passive income: amended (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 36 list of defined terms RWT rules: inserted (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).