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Residential property
Whare nohoanga

Property glossary

List of words and terms used in the property section
Aggregation rule Shareholder
Associated person Taxable supplies
Association rules Trader
Company test Trading stock
GST Tripartite test
Look through company (LTC) Two relatives test
Loss attributing qualifying company (LAQC) Voluntary disclosure
Property Zero rating
Provisional tax  

Aggregation rule

The combination of a number of different rules of association to form an overall association.

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Associated person

Persons and companies, trusts or partnerships which are associated with each other under tax law.

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Association rules

The rules used to determine if several people or entities are associated for tax purposes by their common interests in entities.

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Company test

The test to determine if an individual is associated to a company.

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GST

A tax on the supply of most goods and services in New Zealand.

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Look through company (LTC)

An LTC is a look-through income tax treatment for close companies who elect to use these rules. This means that the company is "looked-through" for income tax purposes. The shareholders of the LTC become liable for income tax on the LTC's profits, while also being able to offset the LTC's losses against any other income.

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Loss attributing qualifying company (LAQC)

A limited liability company that meets Inland Revenue criteria, and has elected to be structured in a way that enables losses to be attributed to shareholders.

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Property

Physical land and buildings and also the rights under an option to purchase property.

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Provisional tax

An advance payment of tax, similar to PAYE, which will be set off against the final tax liability at the end of the tax year.

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Shareholder

An individual or entity that owns or holds part ownership of a company in the form of shares.

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Taxable supplies

Goods or services supplied in New Zealand in the course of business where GST is required to be applied.

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Trader

A term also used to describe property dealers.

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Trading stock

Goods which are purchased for resale as part of a business, for property dealers or traders this will be the properties acquired.

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Tripartite test

Generally means that if person A is associated with B, and B with C, then person A is associated with person C.

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Two relatives test

This test determines if two people are associated by relationship for tax purposes. This includes individuals who are married in a civil union or de facto relationship. It also includes those within two degrees of blood relationship, such as a sibling, parent or offspring.

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Voluntary disclosure

When you tell us if there’s something wrong with your tax return/s before we find out through routine checking or an audit.

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Zero rating

Where GST applies to a transaction but it is applied at the rate of zero percent.

 


Date published: 30 Mar 2011

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