Ngati Porou Claims Settlement Bill

151 Taxation in respect of transfer of assets and liabilities of Te Runanga

• (1) This section applies provided that—

  • (a) the assets and liabilities of Te Runanga become the assets and liabilities of the trustee; and

  • (b) the asset-holding company of Te Runanga becomes the asset-holding company of the trustee.

  (2) On and from the date on which the assets and liabilities vest in the trustee under section 132(1)(a),—

  • (a) the trustee is deemed to be the same person as Te Runanga; and

  • (b) everything done by Te Runanga before the assets and liabilities become those of the trustee is deemed to have been done by the trustee on the date that it was done by Te Runanga.

  (3) Income derived or expenditure incurred by Te Runanga before the assets and liabilities become those of the trustee does not become income derived or expenditure incurred by the trustee just because the assets and liabilities become those of the trustee under section 132(1)(a).

  (4) If income of Te Runanga derived from a financial arrangement, trading stock, revenue account property, or depreciable property is exempt income of Te Runanga but is not exempt income of the trustee, the trustee is treated as having acquired the financial arrangement, trading stock, revenue account property, or depreciable property on the day that it becomes the trustee's property for a consideration that is its market value on that day.

  (5) The trustee must calculate an amount from the income derived by Te Runanga that—

  • (a) was exempt income under sections CW 41 and CW 42 of the Income Tax Act 2007; and

  • (b) was not distributed before the commencement of this Act.

  (6) In subsection (5),—

  • (a) the amount does not represent the corpus of the trustee; and

  • (b) if the trustee distributes that amount to any person, that amount is beneficiary income of that person.

  (4) Subsection (5) applies if income of Te Runanga—

  • (a) is derived from a financial arrangement, trading stock, revenue account property, or depreciable property; and

  • (b) is exempt income of Te Runanga but is not exempt income of the trustee.

  (5) The trustee must be treated as having acquired the financial arrangement, trading stock, revenue account property, or depreciable property on the day that it becomes the trustee's property for a consideration that is its market value on that day.

  (6) The trustee must identify the undistributed charitable amounts, using the following formula:

  x – y

  where—

  x

  is the total amounts derived by Te Runanga that, but for the application of sections CW 41 and CW 42 of the Income Tax Act 2007, would have been taxable income derived by Te Runanga before the commencement of this Act

  y

  is the amounts described in x that have been distributed before the commencement of this Act.

  (6A) The undistributed charitable amounts described in subsection (6) are excluded from the corpus of the trustee for the purposes of the Income Tax Act 2007, to the extent to which they are otherwise included but for this subsection.

  (6B) If the trustee distributes an undistributed charitable amount to a person, that amount is treated as beneficiary income for the purposes of the Income Tax Act 2007, unless subsection (6C) applies.

  (6C) If the trustee distributes an undistributed charitable amount for a charitable purpose, the distribution is exempt income of the recipient.

  (7) In this section, Te Runanga means Te Runanga in its own capacity and in its capacity as a trustee of any trust.