Income Tax Act 2007

If you need more information about this Act, please contact the administering agency: Inland Revenue Department
BC 7 Income tax liability of person with schedular income
Modified income tax liability

(1)

The income tax liability for a tax year of a person who has schedular income for the year is the total of—

(a)

their schedular income tax liability for the year calculated under subsection (2) or (3); and

(b)

the amount that would be their income tax liability for the year if they had no schedular income.

Schedular income tax liability

(2)

If a person has 1 kind of schedular income for a tax year, their schedular income tax liability for the year is the amount that would be the income tax liability for the year if their only income for the year were that schedular income.

Multiple schedular income

(3)

If a person has more than 1 kind of schedular income for a tax year, their schedular income tax liability for the year is the total of the amounts calculated for each kind of schedular income.

Income tax liability of multi-rate PIEs

(4)

The income tax liability for a tax year of a multi-rate PIE is determined under subpart HM (Portfolio investment entities).

Special rule for natural person investors in multi-rate PIEs

(5)

The schedular income tax liability of a natural person investor in a multi-rate PIE, when the rate of tax applied for the year is not equal to the investor’s prescribed investor rate for the year, is calculated under section HM 36B (Calculating PIE schedular income adjustments for natural person investors) to provide an adjustment to the amount of the person’s income tax liability referred to in subsection (1)(b).

Defined in this Act: amount, income, income tax liability, multi-rate PIE, prescribed investor rate, schedular income, schedular income tax liability, tax year

Compare: 2004 No 35 s BC 7

Flowchart B4: Satisfying income tax liability
This diagram is a flow chart showing the completion of the process shown in Flowcharts B2 and B3. It begins with the income tax liability from section BC 6. Sections BC 8(2) and LA 4 set off credits, in the prescribed order, against the income tax liability. If the result is negative, it leads to surplus credits under section BC 8(4) and then to section LA 5. If the result is positive, it leads to terminal tax under section BC 8(3) and then to tax payments under Part R.

Section BC 7(4) heading: added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 4(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section BC 7(4): added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 4(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section BC 7(5) heading: inserted, on 1 April 2020, by section 83(1) (and see section 83(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section BC 7(5): inserted, on 1 April 2020, by section 83(1) (and see section 83(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section BC 7(5): amended (with effect on 1 April 2020), on 30 March 2021, by section 5(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).

Section BC 7 list of defined terms multi-rate PIE: inserted, on 1 April 2010, by section 4(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section BC 7 list of defined terms prescribed investor rate: inserted (with effect on 1 April 2020), on 30 March 2021, by section 5(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).

Flowchart B4: amended, on 1 April 2019, by section 5 (and see section 3 for application) of the Taxation (Research and Development Tax Credits) Act 2019 (2019 No 15).