Section DC 11 — Income Tax Act 2007: Transfers of employment income obligations to associates

DC 11 Transfers of employment income obligations to associates When this section applies (1) This section applies when— (a) an employee of a person ( person A ) becomes an employee of another person ( person B ); and (b) person A and person B are associated persons at the time; and (c) person B assumes person A’s obligation to pay an amount of employment income to the employee; and (d) the employee’s becoming an employee of person B does not result from the sale by person A of a business, or a part of a business, to person B. Deduction (2) Person B is allowed a deduction for the amount of employment income if person A would have been allowed a deduction for the amount if the transfer had not occurred. Link with subpart DA (3) This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. Defined in this Act: amount , associated person , business , capital limitation , deduction , employee , employment income , general limitation , general permission , pay , Compare: 2004 No 35 s DC 10