Section GB 42 — Income Tax Act 2007: Maori authority credit arrangements to obtain tax advantage

GB 42 Maori authority credit arrangements to obtain tax advantage When section GB 43 applies (1) Section GB 43 applies if an arrangement to obtain a tax advantage arises as described in either subsection (2) or (3). Arrangements for share disposal or issue (2) An arrangement is an arrangement to obtain a tax advantage if— (a) the arrangement is for the disposal or issue of a share in a Maori authority that is a company; and (b) a party to the arrangement might reasonably have expected that a taxable Maori authority distribution would be paid in relation to the share with a Maori authority credit attached; and (c) a party might reasonably have expected that a party will or will not be able to obtain a tax advantage from the credit; and (d) a purpose of the arrangement is that a party will obtain a tax advantage; and (e) the purpose is not a merely incidental one. Distribution or credit streaming arrangements (3) An arrangement is an arrangement to obtain a tax advantage if— (a) the arrangement is in relation to 1 or more taxable Maori authority distributions by a Maori authority during 1 or more tax years; and (b) under the arrangement, the Maori authority streams— (i) the distributions; or (ii) the attachment of Maori authority credits; and (c) the streaming will give a higher credit value to a member who will obtain a tax advantage from the higher credit value than to a member who will not or may reasonably be expected to obtain a lesser benefit. Meaning of higher credit value (4) A taxable Maori authority distribution has a higher credit value than another distribution if either of the following applies: (a) the distribution has a Maori authority credit and the other distribution does not: (b) the Maori authority credit ratio under section OK 19(2) (Maori authority credits attached to distributions) of the distribution is higher than that of the other distribution. Defined in this Act: arrangement , Maori authority , Maori authority credit , member , share , tax advantage , taxable Maori authority distribution , Compare: 2004 No 35 s GC 27A(1)–(3)