Section FN 4 — Income Tax Act 2007: Eligibility rules

FN 4 Eligibility rules When company eligible (1) A company is eligible to be part of an imputation group at a particular time if, at the time,— (a) it is resident in New Zealand or resident in Australia; and (b) it is part of the same wholly-owned group of companies; and (c) it is not treated under a double tax agreement as resident in a country other than New Zealand or Australia, as applicable, for the purposes of taxation in the relevant country; and (d) it is required to maintain an imputation credit account under section OB 1 (General rules for companies with imputation credit accounts), or chooses to maintain an account under section OB 2 (Australian companies with imputation credit accounts); and (e) if it is a company that is part of a consolidated group, it meets the criteria set out in subsection (2); and (f) if it is a qualifying company or a mining company, it meets the condition set out in subsection (3); and (g) subsections (4) and (5) do not apply to it. Consolidated group companies (2) A company that is part of a consolidated group is eligible to be part of an imputation group at a particular time if, at the time,— (a) all companies in the consolidated group meet the criteria set out in subsection (1) and are part of the imputation group; and (b) for an imputation group that includes or will include companies from more than 1 consolidated group, the companies in the consolidated groups are part of a single wholly-owned group of companies from the earliest date on which a credit arose and remains uncancelled in the imputation credit account of a consolidated group or an imputation group, all of whose members are, or would be, in the imputation group. Restriction when company of certain type (3) Despite subsections (1) and (2), if a company that is part of an imputation group is 1 of the following types of company, all companies in the imputation group at the time must be the same type as that company: (a) a qualifying company; or (b) a mining company. LAQCs (4) A company is not eligible to be part of an imputation group if it is an LAQC. Anti-avoidance measure (5) A company is not eligible to be part of an imputation group if, for a purpose of enabling a company to be part of an imputation group so as to defeat the intent and application of the imputation rules, the company’s shares— (a) are subject to an arrangement or to a series of related or connected arrangements; or (b) have rights attaching to them extinguished or altered, either directly or indirectly, by any means. Defined in this Act: arrangement , company , consolidated group , double tax agreement , imputation credit account , imputation group , imputation rules , LAQC, mining company , New Zealand , qualifying company , resident in Australia , resident in New Zealand , wholly-owned group , Compare: 2004 No 35 s FDA 1