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New Zealand : government announces change for stapled securities.

Publication date: 10 Mar 08 | Source: TAX NOTES INTERNATIONAL

Issue: Vol 49 No 10 2008

Pages: pp.854-855

The NZ government announced on February 25 that, as a matter of urgency, it will amend the Income Tax Act 2004/2007 to ensure that a debt instrument that is stapled to a share will be treated as equity for tax purposes. The use of a stapled security under current legislation would allow interest paid (which is deductible) as a substitute for dividends (which are not deductible). The effect of this announced policy change is that interest relating to the debt instrument will no longer be deductible.

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Prof Adrian Sawyer
Adrian is Professor of Taxation in the Department of Accounting and Information Systems at the University of Canterbury, Christchurch NZ. - Current at 01 March 2015
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