Section CB 34 — Income Tax Act 2007: Amounts derived by members from mutual associations

CB 34 Amounts derived by members from mutual associations When this section applies (1) This section applies when an association, in relation to a mutual transaction, pays an association rebate to a member in an income year in circumstances where a payment for the transaction would be taken into account in determining the taxable income of the member. Income (2) The amount of the association rebate is income of the member in the income year but only to the extent of the amount of the association’s deduction under section DV 19 (Association rebates). Statutory producer boards: timing of payment (3) If a statutory producer board pays an association rebate to a member that is a mutual association, the association is treated as deriving the amount in the income year in which the producer board chooses under section DV 19(7) to have the amount as the deduction. When amount paid (4) For the purposes of this section, an amount is treated as having been paid to a person when it is credited in account or dealt with in some way in their interest or on their behalf. Subsection (3) overrides this subsection. Relationship with dividend rules (5) An association rebate— (a) is not a dividend to the extent to which it is a payment of the kind described in subsection (2) and is no more than the amount of the deduction the association is allowed under section DV 19 ; and (b) for an association that is not a company, and to the extent to which it is more than the amount of the deduction the association is allowed under section DV 19 , is income of the member. Defined in this Act: amount , association , association rebate , deduction , dividend , income , income year , member , pay , statutory producer board Compare: 2004 No 35 s HF 1(3)(c), (5), (6)