CC 1B Consideration relating to grant, renewal, extension, or transfer of leasehold estate or licence
When this section applies

(1)

This section applies when a person (the payee) derives an amount—

(a)

in relation to a right (the land right) that is—

(i)

a leasehold estate not including a perpetual right of renewal:

(ii)

a licence to use land or as consideration for the grant, renewal, extension, or transfer of the land right; and

(b)

as consideration for—

(i)

the agreement by the payee to the grant, renewal, extension, or transfer of the land right:

(ii)

the grant, renewal, extension, or transfer of the land right.

Income

(2)

The amount is income of the payee.

Exception for payment as consideration for transfer of land right

(3)

The amount is not income of the payee if—

(a)

the payee is the holder of the land right; and

(b)

the amount is consideration for the transfer of the land right to the person paying the amount; and

(c)

the amount is not sourced from funds provided, by the owner of the estate in land from which the land right is granted, for purposes that include obtaining the surrender or termination of the land right; and

(d)

each of the payee and the person paying the amount is not associated with the owner of the estate in land from which the land right is granted.

Exception for tenant or licensee of residential premises

(4)

The amount is not income of the payee if the payee—

(a)

is a natural person and derives the amount as a tenant or licensee of residential premises whose expenditure on the residential premises does not meet the requirements of the general permission; and

(b)

is not associated with the owner of the estate in land from which the land right is granted.

Exception for payment of capital contribution

(5)

The amount is not income of the payee if the amount is derived as a capital contribution.

Exception for payment as consideration for grant of permanent easement

(6)

The amount is not income of the payee if—

(a)

the payee is the owner of a fee simple estate in land; and

(b)

the amount—

(i)

is consideration for the grant, for the duration of the estate, of an easement over the land; and

(ii)

is not a periodic payment.

Defined in this Act: amount, associated, capital contribution, estate, general permission, income, land, leasehold estate, own, pay

Section CC 1B: replaced, on 1 April 2015 (applying to an amount derived on or after that date), by section 10(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section CC 1B(1)(a): amended (with effect on 1 April 2015), on 23 March 2020, by section 87(1) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section CC 1B(1)(a)(ii): amended (with effect on 1 April 2013), on 23 March 2020, by section 86(1) (and see section 86(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section CC 1B(1)(b)(ii): replaced (with effect on 1 April 2015), on 23 March 2020, by section 87(2) (and see section 87(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section CC 1B(6) heading: inserted (with effect on 1 April 2015), on 23 March 2020, by section 87(3) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section CC 1B(6): inserted (with effect on 1 April 2015), on 23 March 2020, by section 87(3) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).