Section DB 8 — Income Tax Act 2007: Interest: money borrowed to acquire shares in group companies

DB 8 Interest: money borrowed to acquire shares in group companies Deduction: borrowing to acquire group company shares (1) A company is allowed a deduction for interest incurred on money borrowed to acquire shares in another company that is part of the same group of companies. Exclusion: group not in existence at year end (2) Subsection (1) does not apply if the 2 companies are not part of the same group of companies at the end of the tax year that corresponds to the income year in which the deduction is allowed. Deduction: interest after resident’s restricted amalgamation (3) A company is allowed a deduction for interest incurred on money borrowed to acquire shares in another company that has ended its existence on a resident’s restricted amalgamation. Exclusion: group not in existence immediately before resident’s restricted amalgamation (4) Subsection (3) does not apply if the 2 companies were not part of the same group of companies immediately before the resident’s restricted amalgamation. Application from income year of resident’s restricted amalgamation (5) Subsection (3) applies in the income year in which the resident’s restricted amalgamation occurs and in later income years. Consolidated groups (6) Section FM 12 (Expenditure when deduction would be denied to consolidated group) may apply to allow a deduction under this section to a company that is part of a consolidated group. Conduit financing arrangements [Repealed] (7) [Repealed] Link with subpart DA (8) This section supplements the general permission and overrides the capital limitation, the exempt income limitation, and the withholding tax limitation. The other general limitations still apply. Defined in this Act: company , consolidated group , deduction , exempt income limitation , general limitation , general permission , group of companies , income year , interest , resident’s restricted amalgamation , share , supplement , withholding tax limitation , Compare: 2004 No 35 s DB 8 Section DB 8(7) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 71(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section DB 8(7): repealed (with effect on 30 June 2009), on 6 October 2009, by section 71(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).