Section CX 17 — Income Tax Act 2007: Benefits provided to employees who are shareholders or investors

CX 17 Benefits provided to employees who are shareholders or investors Benefit provided in connection with employment (1) If a company or a trustee of a group investment fund provides a non-cash benefit to an employee who holds shares in the company or who is an investor in the fund, the benefit is treated as having been provided in connection with the employment. The shares or investment may be held in the employee’s own right or beneficially. Whether fringe benefit or dividend (2) A company or a trustee of a group investment fund that has provided a non-cash benefit to an employee who holds shares in the company or who is an investor in the fund may choose to treat the benefit as a fringe benefit or a dividend. If the company or trustee does not make an election, the benefit is treated as a fringe benefit. If the company or trustee chooses to treat the benefit as a dividend, the FBT rules do not apply. Exclusion (3) Neither subsection (1) nor subsection (2) applies to a non-cash benefit provided by a company to a non-executive director of the company. Non-cash benefits (4) Subsection (2) applies to non-cash benefits that would,— (a) in the absence of section CD 32 (Employee benefits), be dividends under section CD 4 (Transfers of value generally) if provided to a person in their capacity as a shareholder; and (b) in the absence of section CX 4 , be unclassified benefits if provided to a person in their capacity as an employee. Notice of election (5) The company or trustee must give notice to the Commissioner of the election referred to in subsection (2) in the time allowed for filing a fringe benefit tax return for the period in which the benefit was provided. Defined in this Act: Commissioner , company , dividend , employee , employment , FBT rules , fringe benefit , fringe benefit tax , group investment fund , investor , non-executive director , notice , return , share , shareholder , trustee , unclassified benefit Compare: 2004 No 35 s CX 16 Section CX 17(4)(a): amended (with effect on 1 April 2008), on 7 September 2010, by section 17(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).