Section GB 10 — Income Tax Act 2007: Temporary acquisitions of direct control or income interests

GB 10 Temporary acquisitions of direct control or income interests When this section applies (1) This section applies when,— (a) before the end of a quarter, a person (the acquirer ), directly or indirectly acquires a direct control interest or direct income interest in a foreign company (the acquisition ); and (b) the acquisition is not from a New Zealand resident who, immediately before the acquisition, has an income interest of 10% or more in the foreign company from which an attributed CFC loss is incurred; and (c) within 183 days after the acquisition, the acquirer directly or indirectly disposes of a direct control interest or direct income interest in the foreign company (the disposal ); and (d) the acquisition has the effect of increasing an attributed CFC loss of— (i) the acquirer; or (ii) an associated person of the acquirer; or (iii) if the acquirer is a CFC, a person holding an income interest in the acquirer; and (e) the acquisition and disposal are part of an arrangement that has an effect of defeating the intent and application of the international tax rules. Treatment of acquisition (2) The acquisition is treated as not having occurred, when the person’s control interest or income interest in the foreign company at the end of the quarter is calculated, to the extent to which the disposal reverses the acquisition. Defined in this Act: arrangement , associated person , attributed CFC loss , CFC , control interest , direct control interest , direct income interest , foreign company , income interest , international tax rules , quarter , Compare: 2004 No 35 s GC 9(1), (4), (7)