Section GB 9 — Income Tax Act 2007: Temporary disposals of direct control or income interests

GB 9 Temporary disposals 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 disposer ), directly or indirectly disposes of a direct control interest or direct income interest in a foreign company (the disposal ); and (b) the disposal is not to a New Zealand resident who, immediately after the disposal, has an income interest of 10% or more in the foreign company from which attributed CFC income or attributed repatriation is derived; and (c) within 183 days after the disposal, the disposer directly or indirectly acquires a direct control interest or direct income interest in the foreign company (the reacquisition ); and (d) the disposal has the effect of reducing attributed CFC income or attributed repatriation of— (i) the disposer; or (ii) an associated person of the disposer; or (iii) if the disposer is a CFC, a person holding an income interest in the disposer; and (e) the disposal and reacquisition are part of an arrangement that has an effect of defeating the intent and application of the international tax rules. Treatment of disposal (2) The disposal 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 reacquisition reverses the disposal. Defined in this Act: arrangement , associated person , attributed CFC income , attributed repatriation , 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)