Section EW 29 — Income Tax Act 2007: When calculation of base price adjustment required

EW 29 When calculation of base price adjustment required Ceasing to be New Zealand resident (1) A party to a financial arrangement who ceases to be a New Zealand resident must calculate a base price adjustment as at the date of the party’s ceasing to be a New Zealand resident. This subsection is overridden by section EW 30(1) and (2) . Ceasing to be party for purpose of New Zealand business (2) A person who is not a New Zealand resident and who is a party to a financial arrangement for the purpose of a business the party carries on through a fixed establishment in New Zealand must calculate a base price adjustment as at the date of the party’s ceasing to be a party to the arrangement for that purpose. Maturity (3) A party to a financial arrangement must calculate a base price adjustment as at the date on which the arrangement matures. Treated as maturity (4) A financial arrangement that has not matured because an amount has not been paid is treated as if it had matured if— (a) the amount not paid is immaterial; and (b) the arrangement has been structured to avoid the application of section EW 31 . Disposal (5) A party to a financial arrangement who disposes of the arrangement must calculate a base price adjustment as at the date of the disposal. Absolute assignment (6) A party to a financial arrangement who makes an absolute assignment of all the party’s rights under the arrangement must calculate a base price adjustment as at the date of the absolute assignment. Defeasance (7) A party to a financial arrangement who makes a legal defeasance of all the party’s obligations under the arrangement must calculate a base price adjustment as at the date of the legal defeasance. Sale at discount to associated person (8) A party to a financial arrangement that is a debt must calculate a base price adjustment as at the date on which the creditor sells the debt to a person associated with the debtor and at a discount in the circumstances described in section EW 43 . Discharge without consideration (9) A party to a financial arrangement must calculate a base price adjustment as at the date on which a party to the arrangement is discharged from making all remaining payments under the arrangement without fully adequate consideration. Operation of law (10) A party to a financial arrangement must calculate a base price adjustment as at the date on which a party to the arrangement is released from making all remaining payments under the arrangement under the Insolvency Act 2006 or the Companies Act 1993 or the laws of a country or territory other than New Zealand. Composition with creditors (11) A party to a financial arrangement must calculate a base price adjustment as at the date on which a party to the arrangement is released from making all remaining payments under the arrangement by a deed or agreement of composition with the party’s creditors. Lapse of time (12) A party to a financial arrangement must calculate a base price adjustment as at the date on which all remaining payments under the arrangement become irrecoverable or unenforceable through the lapse of time. Changing from fair value method (13) A party to a financial arrangement must calculate a base price adjustment, for the first income year for which a changed method is used for the financial arrangement, where the change in method is— (a) from the fair value method and the financial arrangement is not subject to a creditor workout: (b) from the market value method to a method for IFRS under section EW 15B . Defined in this Act: amount , associated person , business , consideration , creditor workout , fair value method , financial arrangement , fixed establishment , legal defeasance , maturity , New Zealand , New Zealand resident , pay , Compare: 2004 No 35 s EW 29 Section EW 29(13) heading: added, on 1 April 2008, by section 378(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EW 29(13): amended (with effect on 1 April 2008), on 29 August 2011, by section 33 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section EW 29(13): substituted (with effect on 1 April 2008), on 6 October 2009, by section 146(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EW 29 list of defined terms creditor workout : inserted (with effect on 1 April 2008), on 6 October 2009, by section 146(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EW 29 list of defined terms fair value method : inserted, on 1 April 2008, by section 378(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).