Section EW 37 — Income Tax Act 2007: Consideration when person enters rules: accrued obligation

EW 37 Consideration when person enters rules: accrued obligation When this section applies (1) This section applies to a person who is a party to a financial arrangement if, when the person has an accrued obligation to pay consideration under the arrangement, 1 or more of the following situations arise: (a) the person is a non-resident who becomes a party to the arrangement for the purpose of a business carried on by the person through a fixed establishment in New Zealand: (b) the person is a non-resident who— (i) becomes a New Zealand resident who is not a transitional resident; and (ii) is not, immediately before becoming a New Zealand resident, a party to the arrangement for the purpose of a business carried on by the person through a fixed establishment in New Zealand: (c) the person is a transitional resident for whom the arrangement ceases to be an excepted financial arrangement described in section EW 5(17) : (d) the person is a transitional resident who becomes a New Zealand resident who is not a transitional resident, resulting in the arrangement ceasing to be an excepted financial arrangement described in section EW 5(17) : (e) the person stops using the arrangement for a private or domestic purpose, resulting in the arrangement ceasing to be an excepted financial arrangement described in any of section EW 5(18) to (20) . Assumption and consideration (2) The person is treated as having assumed the accrued obligation immediately after the situation arose and as having been paid the market value that a contract to assume the obligation had at that time. Defined in this Act: accrued obligation , business , consideration , excepted financial arrangement , financial arrangement , fixed establishment , New Zealand , New Zealand resident , non-resident , pay , transitional resident , Compare: 2004 No 35 s EW 37