Section ED 2 — Income Tax Act 2007: Transfers of certain excepted financial arrangements within wholly-owned groups

ED 2 Transfers of certain excepted financial arrangements within wholly-owned groups When this section applies (1) This section applies when— (a) a company that is part of a wholly-owned group of companies ( company A ) transfers to another company in the same group ( company B ) an excepted financial arrangement that is revenue account property of company A; and (b) the transfer of the excepted financial arrangement is not made under a share-lending arrangement; and (c) both companies are resident in New Zealand on the date of the transfer; and (d) the market value of the excepted financial arrangement on the date of the transfer is less than its cost to company A. Transfer at cost (2) The consideration for the transfer is treated as being equal to the cost of the excepted financial arrangement to company A. Company stops being part of group (3) If company B stops being part of the wholly-owned group, the company is treated as disposing of and reacquiring the excepted financial arrangement at its market value at the time the company stops being part of the group. Not dividend (4) A transfer of an excepted financial arrangement to which this section applies does not give rise to a dividend. Defined in this Act: company , dividend , excepted financial arrangement , resident in New Zealand , revenue account property , wholly-owned group of companies , Compare: 2004 No 35 s ED 2