Section FE 27 — Income Tax Act 2007: Establishing companies under parent’s control

FE 27 Establishing companies under parent’s control Choosing threshold (1) A control threshold that the New Zealand parent of an excess debt entity chooses under this section must apply consistently to all companies that are members of the group. Percentages (2) The New Zealand parent of an excess debt entity may choose as the relevant control threshold a percentage that is either— (a) more than 50%; or (b) 66% or more. Threshold over 50% (3) For a control threshold that is more than 50%, the company or companies treated as controlled by the New Zealand parent are those in which direct ownership interests of more than 50% are held collectively by either or both— (a) the New Zealand parent; and (b) any other company included in the New Zealand group. Threshold of 66% or more (4) For a control threshold of 66% or more, the companies treated as controlled by the New Zealand parent are those in which direct ownership interests of 66% or more are held collectively by any combination of— (a) the New Zealand parent; and (b) a non-resident if— (i) they have ownership interests of 50% or more in both the entity and the New Zealand parent; and (ii) a company included in the New Zealand group as a result of the control percentage would have been included in the group under section FE 28 through the application of the control test in subsection (3), had the control percentage in that subsection been chosen; and (c) any other company or companies that are included in the New Zealand group under section FE 28 through the application of any of these paragraphs. Default threshold of 66% (5) If the New Zealand parent does not choose a control threshold under subsection (3) or (4), the control threshold applying to the New Zealand group is 66% or more. Application to other companies of New Zealand parent (6) The control threshold applying for an income year in relation to the entity and its New Zealand parent applies to any company of the New Zealand parent. Defined in this Act: company , excess debt entity , income year , New Zealand , non-resident , Compare: 2004 No 35 s FG 4(12)–(14B) Section FE 27 list of defined terms control : repealed, on 1 April 2010, by section 594 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).