Section EX 67B — Income Tax Act 2007: Revaluation of inherited interests in grey list companies

EX 67B Revaluation of inherited interests in grey list companies When this section applies (1) This section applies when— (a) a person inherited, before 1 April 2007, an interest in a FIF that was a grey list company when the interest was inherited; and (b) the cost of the interest for the person is equal to zero. Treatment as disposal and reacquisition (2) The person is treated as having— (a) disposed of the interest immediately before this section applied to the person and the interest; and (b) reacquired the interest as soon as this section applied to the person and the interest; and (c) received for the disposal and paid for the reacquisition an amount equal to the market value of the interest at the time of the disposal. Cost of inherited interest for purposes of tax liability (3) For determining a tax liability of the person arising from the disposal, the cost of the interest for the person at the time of the inheritance is treated as being the lesser of— (a) the market value of the interest at the time of the inheritance: (b) the market value of the interest at the time of the disposal. Payment of tax liability arising from revaluation (4) A person who is liable to pay an amount of income tax (the amount of tax ) because of a disposal in an income year, and related acquisition, treated as occurring under this section— (a) may satisfy the liability by paying to the Commissioner— (i) at least one third of the amount of tax in the income year following the income year in which the disposal is treated as occurring; and (ii) at least one half of the balance of the amount of tax remaining owing after payment made under subparagraph (i), in the second income year following the income year in which the disposal is treated as occurring; and (iii) the balance of the amount of tax remaining owing after payments made under subparagraphs (i) and (ii), in the third income year following the income year in which the disposal is treated as occurring: (b) is not liable to pay any penalty or interest for which the person would otherwise be liable for an inaccuracy in an estimate, or shortfall in the payment, of provisional tax to the extent to which the inaccuracy or shortfall arises because of the disposals. Defined in this Act: amount , Commissioner , dispose , FIF , grey list company , income tax , income year , market value , pay , provisional tax , tax Section EX 67B: inserted, on 7 May 2012, by section 47 of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).