Section HD 14 — Income Tax Act 2007: Companies issuing debentures

HD 14 Companies issuing debentures Agency (1) A company is treated as an agent of a person if— (a) the company has issued a debenture; and (b) the person, as a debenture holder, derives income from the debenture. Excluded debentures (2) Subsection (1) does not apply to a debenture if— (a) it is a profit-related debenture or substituting debenture to which section FA 2 (Recharacterisation of certain debentures) applies or a stapled debt security to which section FA 2B (Stapled debt securities) applies; or (b) it is issued to a New Zealand resident, and the company provides the Commissioner with a certified list containing particulars of the debentures, the name and details of each person to whom a debenture has been issued, and details of the interest payments before an assessment is made in a tax year of the debenture holder. Liability of persons named (3) A person named as a debenture holder in the list referred to in subsection (2)(b) is liable for income tax on income derived from the debenture. Subsection (4) overrides this subsection. Continuing liability until notification (4) Despite section BB 2 (Main obligations), if a debenture holder disposes of a debenture, they remain liable for income tax unless they notify the Commissioner of the disposal before an assessment is made in a tax year that takes into account the income derived from the debentures. On notification, the subsequent holder is liable in relation to the debentures, and the liability of the transferor is ended. Recovery of tax paid (5) If a person who formerly held a debenture pays income tax on taxable income that takes into account income derived by a subsequent holder, the income tax is treated as paid on behalf of the subsequent holder to the extent of the liability of the subsequent holder, and the person may recover that amount from them. Matters not taken into account (6) For the purposes of subsection (1), it does not matter whether the debenture is charged on the company’s property, nor whether a debenture holder is an absentee. Defined in this Act: absentee , agent , assessment , Commissioner , company , debenture , debenture holder , income , income tax , interest , New Zealand resident , notify , pay , profit-related debenture , stapled debt security , tax , tax year , taxable income , Compare: 2004 No 35 ss HK 12 , HK 13 Section HD 14(2)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 268(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HD 14 list of defined terms stapled debt security : inserted (with effect on 1 April 2008), on 6 October 2009, by section 268(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).