New Zealand : government announces change for stapled securities.
10 Mar 08 |
TAX NOTES INTERNATIONAL
Issue: Vol 49 No 10 2008
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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Adrian is Professor of Taxation in the
Department of Accounting and Information Systems at the University of Canterbury,
- Current at
01 March 2015