Section GB 31 — Income Tax Act 2007: FBT arrangements: general

GB 31 FBT arrangements: general When this section applies (1) This section applies when— (a) 2 or more persons enter into an arrangement; and (b) a purpose or effect of the arrangement is to defeat the intent and application of any of the FBT rules; and (c) the purpose or effect is not merely incidental. FBT rules treated as applying (2) For the purposes of the FBT rules, the Commissioner may treat— (a) a party to the arrangement (the provider ) as the employer of a person (the recipient ) of whom the Commissioner notifies the provider: (b) the recipient as the employee of the provider: (c) a benefit as being provided by the provider to the recipient through the employment of the recipient. Actual or likely benefit (3) The Commissioner may apply subsection (2)(c) only in the case of a benefit that,— (a) is in fact provided by the provider to the recipient; or (b) had the arrangement not occurred, the recipient— (i) would have obtained; or (ii) would in all likelihood have obtained; or (iii) might be expected to have obtained. Arrangements to reduce motor vehicle costs (4) Schedule 5, clause 4(c) (Fringe benefit values for motor vehicles) may apply to treat the cost of a motor vehicle as equal to its market value. Defined in this Act: arrangement , Commissioner , employee , employer , employment , FBT rules , Compare: 2004 No 35 ss GC 16(b) , GC 17