Section GB 25B — Income Tax Act 2007: Excessive effective look-through interests

GB 25B Excessive effective look-through interests When this section applies (1) This section applies to the extent to which, for an income year,–– (a) a person (an owner ) has an effective look-through interest for a look-through company (the LTC ); and (b) for the LTC, 2 or more owners are relatives, 1 of whom is under 20 years old (the relevant relative ); and (c) the Commissioner considers that the income arising from the application of section HB 1 (Look-through companies are transparent) for the relevant relative is excessive. Reallocation of effective look-through interests (2) Despite section HB 1, the effective look-through interests for the person are the interests that the Commissioner considers reasonable for the income year or part of the income year, as applicable, without taking into account an amount provided to the relevant relative. Matters for Commissioner's consideration (3) The Commissioner may take into account each of the following matters when applying this section: (a) the nature and extent of services rendered by the relevant relative: (b) the value of the contributions made by the respective owners, by way of services, capital, or otherwise: (c) any other relevant matters. Defined in this Act: effective look-through interest , income year , look-through company , relative Section GB 25B: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 68(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).