Section EW 36 — Income Tax Act 2007: Consideration when person exits from rules: accrued entitlement

EW 36 Consideration when person exits from rules: accrued entitlement When this section applies (1) This section applies when— (a) a person is a party to a financial arrangement; and (b) 1 of the following situations arises: (i) the person ceases to be resident in New Zealand and is not a party to the arrangement for the purpose of a business carried on by them through a fixed establishment in New Zealand; or (ii) the person, not resident in New Zealand, ceases to be a party to the arrangement for the purpose of a business carried on by them through a fixed establishment in New Zealand; or (iii) the person starts using the arrangement for a private or domestic purpose and so it becomes an excepted financial arrangement described in any of section EW 5(18) to (20) ; and (c) at the time the situation arises, the person has an accrued entitlement to be paid consideration under the arrangement. Disposal and consideration (2) The person is treated as having disposed of their accrued entitlement immediately before the situation arose and as having been paid the market value that the accrued entitlement had at that time. Defined in this Act: accrued entitlement , business , consideration , excepted financial arrangement , financial arrangement , fixed establishment , New Zealand , pay , resident in New Zealand , Compare: 2004 No 35 s EW 36