Section CZ 9B — Income Tax Act 2007: Available capital distribution amount: 1988 to 2010

CZ 9B Available capital distribution amount: 1988 to 2010 When this section applies (1) This section applies for the purposes of section CD 44 (Available capital distribution amount) in relation to capital gain amounts derived or capital loss amounts incurred in the period that starts on 1 April 1988 and ends on 31 March 2010. Related person transactions (2) No capital gain amount is derived or capital loss amount incurred by a company disposing of property under an arrangement with a related person. But this subsection does not apply if— (a) the company is a close company; and (b) the related person is not a company; and (c) the disposal is on the liquidation of the company. Meaning of related person (3) In this section, related person means a person related to a company (the first company ) because 1 of the following applies to the person and the first company: (a) the person owns, can control, directly or indirectly, or has the right to acquire 20% or more of the first company's ordinary shares; or (b) the person owns, can control, directly or indirectly, or has the right to acquire 20% or more of the voting rights of shareholders in the first company; or (c) the person is a company and the first company owns, can control, directly or indirectly, or has the right to acquire 20% or more of the ordinary shares in the person; or (d) the person is a company and the first company owns, can control, directly or indirectly, or has the right to acquire 20% or more of the voting rights of shareholders in the company; or (e) the person is a company and 20% or more of the shares or voting rights in the person are owned or controlled by persons that also own, control, or have the right to acquire 20% or more of the shares or voting rights in the first company; or (f) the person is a partner or co-venturer of the first company; or (g) the person is the trustee of a trust and the first company, or a person who is a related person of the first company under this subsection, benefits or can benefit under the trust, directly or indirectly; or (h) the person is a partnership and 1 or more persons, that are related persons of the first company under this subsection, are entitled to 50% or more of the partnership's assets or profits or are able to control the partnership. Look-through relatives and nominees (4) For the purposes of subsection (3), a person is treated as holding anything held by— (a) their spouse, civil union partner, or de facto partner; or (b) their child; or (c) a child of their spouse, civil union partner, or de facto partner; or (d) a spouse, civil union partner, or de facto partner of their child, or of a child of their spouse, civil union partner, or de facto partner. Look-through interposed companies (5) For the purposes of subsection (3)(e), if shares or voting rights in a company are owned or controlled by another company, a look-through approach must be applied. The look-through approach requires that— (a) the shares or voting rights are treated as if owned or controlled by the shareholders in the other company; and (b) if a shareholder in the other company is a company, that shareholder's portion of the shares or voting rights are treated as if owned or controlled by the shareholders in the shareholder company; and (c) the approach is applied in the same way to any chain of companies, whatever the length of the chain. Relationship with section CD 44 (6) Section CD 44(7)(c) (Available capital distribution amount) overrides this section. Defined in this Act: amount , close company , company , liquidation , related person , share , shareholder , trustee Section CZ 9B: inserted, on 1 April 2010, by section 67 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CZ 9B(2)(c): amended (with effect on 1 April 2010), on 7 September 2010, by section 19 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section CZ 9B(6) heading: added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 9(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section CZ 9B(6): added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 9(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).