Papers Past | Parliamentary Papers | Appendix to the Journals of the House of Representatives | 1950 Session I | THE TEXT OF A DRAFT CONSOLIDATION OF THE LAND AND...

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1950 NEW ZEALAND

THE TEXT OF A DRAFT CONSOLIDATION OF THE LAND AND INCOME TAX ACT AND OF A SOCIAL SECURITY CHARGE ACT

Laid on the Table of the House of Representatives by Leave

By Authority: E. E. Owen, Government Printer, Wellington.—l9sl.

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LAND AND INCOME TAX BILL EXPLANATORY NOTE The Bill is a compilation of the Land and Income Tax Act, 1923, and its amendments now in force. It assembles the existing legislation into one enactment, but makes no change in the law, except for repealing the enactments practically spent which are so indicated in the subjoined Comparative Table. The disposition in the Bill of existing provisions to be repealed and replaced, and the reasons for omission of existing provisions to be repealed without replacement, are shown in the subjoined Comparative Table. The sources of the clauses of the Bill are shown in the marginal notes. Exemptions from taxation of a particular institution, and express declarations of liability, are regularly contained in legislation relating to that institution. Not being part of the general law of land tax and income tax, they have not been transferred to the compilation. They include the following enactments : 1908, No. 71: The Government Accident Insurance Act, 1908, s. 26. —The General Manager of the State Fire Insurance Office, a corporation sole, to be liable to assessment and taxation as in the case of an accident insurance company. 1921-22, No. 48 : The Public Trust Office Amendment Act, 1921-22, s. 35.—An advance by the Public Trustee to an estate or a beneficiary on the security of the assets or a share therein, including land, to be treated for purposes of land tax as a registered mortgage. 1923, No. 21: The Land and Income Tax Act, 1923, s. 94. —The State Fire Insurance General Manager, as a corporation sole, to be liable to income tax. 1927, No. 45 : The Rural Intermediate Credit Act, 1927, s. 31. —The Rural Intermediate Credit Board to be deemed a public authority within the meaning of the Land and Income Tax Act, 1923, for the purposes of s. 78 (h) of that Act (with effect of exemption from tax of income derived by persons not resident in New Zealand from debentures issued under the Act of 1927). The Rural Intermediate Credit Board is now the Board of Management constituted by s. 9 of the State Advances Corporation Act, 1936 ; see State Advances Corporation Act, 1934-35, s. 40. 1929, No. 12: The Land and Income Tax Amendment Act, 1929, s. 9.—The Public Trustee to be assessed for land tax as mortgagee in possession of land purchased by him before the passing of the Act upon default by his mortgagor. 1929, No. 29: The Finance Act, 1929, s. 28.—The trustees of Cornwall Park exempted from income tax, and from half amount of land tax. 1930, No. 22: The National Art Gallery and Dominion Museum Act, 1930. —The Board of Trustees of the National Art Gallery and Dominion Museum to be exempt from land tax and income tax. 1931 r No. 6 : The Hawkes Bay Earthquake Act, 1931, s. 45. —Upon report of a Committee in case of serious hardship, the Commissioner of Taxes may release a taxpayer from liability for land tax or income tax for certain years. 1932, No. 28 : The Waitangi National Trust Board Act, 1932, s. 10. —The land of the Waitangi National Trust Board to be exempt from land tax. 1933, No. 11: The Reserve Bank of New Zealand Act, 1933, s. 52. —The Reserve Bank of New Zealand to be exempt from public taxation to the same extent as the Crown. 1935, No. 32: The Land and Income Tax Amendment Act, 1935, s. 3; as amended by 1936, No. 34 : The Land and Income Tax Amendment Act, 1936, s. s.—The Masterton Trust Lands Trustees and the Greytown Trust Lands Trustees to be assessed for land tax at one fourth of regular rate, or at |d. in the pound of the unimproved value, whichever is the greater.

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1938, No. 9: The Carter Observatory Act, 1938, s. 22. —The Carter Observatory Board exempt from land tax and income tax. 1938, No. 11: The King George the Fifth Memorial Fund Act, 1938, s. 15. —The King George the Fifth Memorial Fund Board exempt from land tax and income tax. 1938, No. 21: The New Zealand Centennial Act, 1938, s. 28. —An Order in Council may remit or reduce land tax or income tax payable by the Centennial Exhibition Company. 1947, No. 57: The Superannuation Act, 1947, s. 15.—N0 land tax or income tax payable in respect of securities or other property held on behalf of Government Superannuation Board, or income derived therefrom. 1948, No. 51: The Armed Forces Canteens Board Act, 1948, s. 16. —The Armed Forces Canteen Council exempt from land tax and income tax. 1948, No. 78: The Finance Act (No. 2), 1948, s. 41. —No land tax or income tax payable in respect of securities or other property held by or on behalf of the National Provident Fund Board, or income derived therefrom. Any references in these enactments to the Land and Income Tax Act, 1923, or other Acts compiled, will, on the enactment of the Bill, by the operation of s. 21 (1) of the Acts Interpretation Act, 1924, be construed as referring to the new Act. A general exemption from liability for (inter alia) land tax and income tax is granted, or authorized to be granted, to persons possessing certain diplomatic or equivalent status or immunity by the following enactments : The Diplomatic Privileges Act, 1708 (Imp.), 7 Ann., c. 12. 1943, No. 9 : The Finance Act (No. 2), 1943, s. 7. 1947, No. 39 : The Diplomatic Privileges Extension Act, 1947. No references to these enactments would be appropriate in the Bill. COMPARATIVE TABLE Disposition in Bill, or Reason for Omission, of Enactments Repealed by the Bill Reasons for omission are indicated as follows : a A Short Title. b A declaration of inclusion in the principal Act. c A date of commencement or application. d A repeal of a previous enactment. e An amendment of the previous enactment mentioned. f An enactment excluded from the repeal effected by the Bill. g An enactment repeated in the Bill, but continued in force with amendment. h An enactment treated as spent. R. denotes a provision already repealed by the previous enactment mentioned. 1923, No. 21—The Land and Income Tax Act, 1923 Section. Clause of Bill or Reason for Omission. 1 .. .. .. '..a 2 .. .. .. .. 2 3 .. .. .. .. 6 4 .. .. .. .. 7 5 .. .. .. ..10 6 .. .. .. ..11 7 .. .. .. ..12

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1923, No. 21—The Land and Income Tax Act, 1923—continued Section. Clause of Bill or Reason for Omission. 8 .. .. .. ..13 9 .. .. .. ..18 10 .. .. .. ..19 11 .. .. .. ..20 12 .. .. .. ..21 13 .. .. .. ..22 14 .. .. .. ..25 15 .. .. .. ..26 16 .. .. .. ..28 17 .. .. .. ..29 18 .. .. .. . . 30 19 .. .. .. ..31 20 .. .. .. ..32 21 .. .. .. . 33 22 .. .. .. ..34 23 .. .. .. ..35 24 .. .. .. ..36 25 .. .. .. ..37 26 .. .. .. ..38 27 .. .. .. ..39 28 .. .. .. ..40 29 .. .. .. ..41 30 .. .. .. ..42 31 .. .. .. ..43 32 .. .. .. ..44 33 .. .. .. . . 45 34.. .. .. ..46 35 .. .. ..47 36 .. .. .. ..48 37 .. .. .. ..49 38 .. ... .. ..50 39 .. .. .. .. 51 40 .. .. .. ..52 41 .. .. .. ..53 42 .. .. .. ..54 43 .. .. .. .. R., 1929, No. 12, s. 5. 44 .. .. .. ..55 45 .. .. .. ..56 46 .. .. .. .. R., 1929, No. 12, s. 5. 47 .. .. .. ..57 48 .. .. .. ..58 49 .. .. .. ..59 50 .. .. .. ..60 51 .. .. .. ..61 52 .. .. .. .. R., 1939, No. 20, s. 2. 53 .. .. .. ..63 54 .. .. .. ..64 55 .. .. .. ..65 56 .. .. .. ..66 57 .. .. .. ..67

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1923, No. 21 —The Land and Income Tax Act, 1923—continued Section. Clause of Bill or Reason for Omission. 53 •. .. .. .. 68 59 .. .. .. ..69 60 .. .. .. ..70 6 71 62 .. .. .. ..72 63 .. .. .. ..73 64 .. .. .. ..74 6 75 66 .. .. .. ..77 6 78 68 .. .. .. ..79 69 .. .. .. ..80 70 .. .. .. ..81 7 82 72 .. .. .. .. 84 73 .. .. .. ..85 74 .. .. .. .. 88 75 .. .. .. .. R., 1945, No. 37, s. 6. 76 .. .. .. .. R., 1939, No. 34, s. 11. 7 94 78 .. .. .. ..97 79 .. .. .. .. 99 80 (1) (a) 107 80 (1) (b) to (h) .. .. 112 80 (2) .. .. .. 113 81 .. .. .. .. 114, 107 (5). 82 .. .. .. ..132 83 .. .. .. .. R., 1931, No. 20, s. 5. 84 .. .. .. ..153 85 .. .. .. ..135 86 .. .. .. ..154 87 .. .. .. ..155 88 .. .. .. .. 157 89 .. .. .. .. 158 90 .. .. .. '.. 105 91 .. .. .. .. R., 1932-33, No. 40 s. 9. 92 .. .. .. .. R., 1941, No. 18, s. 3. 93 .. .. .. ..139 94 /(247 (6)). 95 .. .. .. .. R., 1930, No. 8, s. 9. 96 .. .. ..- ..141 97 .. .. .. ..142 98 .. .. .. ..145 99 .. .. .. ..149 100 .. .. .. . . R., 1925, No. 12, s. 4. 101 .. .. .. ..16 102 .. .. .. ..161 103 .. .. .. .193 104 .. .. .. .. 156 105 .. .. .. ..173

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1923, No. 21 —The Land and Income Tax Act, 1923—continued Section. Clause of Bill or Reason for Omission. 106 .. .. ..190 107 .. .. .. -.116 108 .. .. .. ..17 109 .. .. .. ..194 110 .. .. .. ..195 11 165 11 182 113 .. .. .. ..187 114 .. .. .. ..183 11 184 11 177 11 147 11 179 11 180 120 .. .. .. ..188 121 .. .. .. ..189 122 .. .. .. ..192 123 .. .. .. .. 185 124 .. .. .. ..175 12 176 12 171 127 .. .. .. ..172 128 .. .. .. .. 166 129 .. .. .. ■■ 167 130 .. .. .. ..168 13 169 132 .. .. .. ..170 133 .. .. .. ..196 134 .. .. .. .. R., 1932, No. 11, s. 53. 135 .. .. ..200 136 .. .. .. -• 201 137 .. .. ..203 138 .. .. .. ..204 139 .. .. .. 205 140 .. .. . . .. 206 141 .. .. .. .207 142 .. .. .. ..208 143 .. .. .. ..209 14 210 145 .. .. .. ..211 14 212 147 .. .. .. ..213 148 .. .. .. ..215 149 .. .. .. .. 217 150 .. .. .. ..218 151 .. .. .. ..219 152 .. .. .. .. 220 153 .. .. .. ..221 154 .. .. .. ..222 155 .. .. .. ..223

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1923, No. 21—The Land and Income Tax Act, 1923 —continued Section. Clause of Bill or Reason for Omission. 156 .. .. .. ..224 157 .. .. .. ..225 158 .. .. .. ..226 159 .. .. .. ..227 160 .. .. .. ..228 161 .. .. .. ..230 162 .. .. .. ..231 163 .. .. .. .. 233 (c/. 1948, No. 78, s. 12). 164 .. .. .. ..235 165 .. .. .. ..236 166 .. .. .. ..237 167 .. .. .. ..238 168 .. .. .. .. R., 1944, No. 28, s. 8. 169 . . .. .. .. R., 1937, No. 36, s. 7. 170 .. .. .. ..243 171 .. .. .. ..244 172 .. .. .. ..245 173 .. .. .. ..246 174 .. .. .. .. c. 175 .. .. .. .. Spent. 176 .. .. .. .. Spent. 17 " .. d. 1924, No. 22 —The Land and Income Tax Amendment Act, 1924 Section. Clause of Bill or Reason for Omission. 1 .. . . .. a, b. 2.. .. .. .. e (1923, No. 21, s. 49). 3.. .. .. .. e (1923, No. 21, s. 58). 4.. .. .. .. e (1923, No. 21, s. 71). 5.. .. .. .. R., 1939, No. 34, s. 12. 6.. .. .. .. e (1923, No. 21, s. 78). 7.. .. .. .. e (1923, No. 21, s. 79). 8.. .. .. .. e (1923, No. 21, s. 79). 9.. .. .. .. R., 1929, No. 12, ss. 8, 11. 10 .. .. .. .. R., 1930, No. 8, s. 8. 11 .. .. .. .. R., 1940, No. 3, s. 11. 1924, No. 64—The Finance Act, 1924 Section. Clause of Bill. 12 .. .. .. ..98 1925, No. 12—The Land and Income Tax Amendment Act, 1925 Section. Clause of Bill or Reason for Omission. 1 .. .. .. .. a, b. 2 h 3 .. .. .. ..76 4.. .. .. .. e (1923, No. 21, s. 78). 5.. .. .. .. e (1923, No. 21, s. 93). 6.. .. .. .. R., 1932, No. 11, s. 53.

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1926, No. 24—The Land and Income Tax Amendment Act, 1926 Section. Clause of Bill or Reason for Omission. 1 . . . . . . .. a, b. 2.. .. .. .. e (1923, No. 21, s. 67). 3.. .. .. .. e (1923, No. 21, s. 74). 4.. .. .. .. e (1923, No. 21, s. 71). 5 .. .. .. ..120 6.. . . .. R., 1931, No. 20, s. 5. 7 .. .. .. ..191 8 .. .. .. .. e (1923, No. 21, s. 122). 9.. .. .. R., 1940, No. 3, s. 11. 1927, No. 12—The Land and Income Tax Amendment Act, 1927 Section. Clause of Bill or Reason for Omission. 1 . . . . . . . . a, b. 2.. .. .. .. R., 1931, No. 20, s. 3. 3 .. .. ..178 1929, No. 12—The Land and Income Tax Amendment Act, 1929 Section. Clause of Bill or Reason for Omission. 1 .. .. . .. a, b. 2.. .. .. .. R., 1930, No. 8, s. 2. 3.. .. .. .. R., 1930, No. 8, s. 2. 4.. .. .. .. e (1923, No. 21, s. 42). 5 (1) .. .. .. d 5 (2) .. .. .. e (1923, No. 21, s. 44). 5 (3) .. .. .. e (1923, No. 21, s. 45). 6.. .. .. .. e (1923, No. 21, s. 49 ; 1924, No. 22, s. 2). 7.. .. .. .. e (1923, No. 21, s. 65). 8.. .. .. .. e (1923, No. 21, s. 69). 9 /(247 (6)). 10 .. .. .. R., 1940, No. 3, s. 11. 11 .. .. .. .. R., 1930, No. 8, s. 4. 12 .. .. .. .. R., 1930, No. 8, s. 4. 13 .. .. .. .. R., 1939, No. 34, s. 16. 14 .. .. .. . R., 1945, No. 37, s. 6. 15 .. .. .. .. R., 1945, No. 37, s. 6. 16 .. .. .. .. e (1923, No. 21, s. 99). 1930, No. B—The Land and Income Tax Amendment Act, 1930 Section. Clause of Bill or Reason for Omission. 1 . . . . . . . . a, b. 2.. .. .. .. d, h. 3.. .. .. .. e (1923, No. 21, s. 49 : 1929, No. 12, s. 6). 4., .. .. .. R., 1939, No. 34, s. 14. 5.. .. .. .. e (1923, No. 21, s. 78). 6.. .. .. .. e (1923, No. 21, s. 80). 7.. .. .. .. R., 1945, No. 37, s. 18. 8.. .. .. .. R., 1931, No. 20, s. 5. 9 .. .. .. ..140 10 .. .. .. .. e (1923, No. 21, s. 96).

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1931, No. 20—The Land and Income Tax Amendment Act, 1931 Section. Clause of Bill or Reason for Omission. 1 . . . . . . .. a, b. 2 . . . . . . . . d 3.. ... .. .. R., 1936, No. 34, s. 6. 4.. .. .. .. R., 1939, No. 34, s. 14. 5 .. .. .. d 6 .. .. .. ..86 7 h 1931, No. 44 —The Finance Act, 1931 (No. 4) Section. Reason for Omission. 13 .. .. .. .. e (1923, No. 21, s. 97). 1932, No. B—The8 —The National Expenditure Adjustment Act, 1932 Section. Clause of Bill. 46 (8) .. .. ..95 1932-33, No. 40—The Land and Income Tax Amendment Act, 1932-33 Section. Clause of Bill or Reason for Omission. 1 . . .. .. .. a, b. 2.. .. .. .. R., 1950, No. 22, s. 4. 3 .. .. .. ..100 4 .. .. .. ..89 5.. .. .. .. R., 1936, No. 34, s. 6. 6.. .. .. .. e (1923, No. 21, s. 78). 7.. .. .. .. e (1923, No. 21, s. 80). 8.. .. .. .. R., 1936, No. 34, s. 8. 9.. .. .. .. R., 1941, No. 18, s. 3. 10 .. .. .. ..232 1932-33, No. 42—The Finance Act, 1932-33 Section. Clause of Bill. 10 .. .. .. ..96 1933, No. 43—The Land and Income Tax Amendment Act, 1933 Section. Clause of Bill or Reason for Omission. 1 .. .. .. .. a, b. 2 .. .. .. ..90 3 91 4.. .. .. .. R., 1948, No. 78, s. 13. 5 .. .. .. ..94 6.. .. .. .. R., 1946, No. 38, s. 3. 7 .. .. .. .. c. 1934, No. 31 —The Finance Act (No. 3), 1934 Section. Clause of Bill. 8 .. ... .. ..199

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1935, No. 32—The Land and Income Tax Amendment Act, 1935 Section. Clause of Bill or Reason for Omission. 1 . . . . . . .. a, b. 2.. .. .. .. R., 1948, No. 78, s. 41. 3.. .. .. .. 247 (6) and Third Schedule. 4.. .. .. .. R., 1939, No. 34, s. 11. 5.. .. .. .. R., 1939, No. 34, s. 22. 6.. .. .. .. e (1923, No. 21, s. 78). 7.. .. .. .. R., 1950, No. 87, s. 10 (6). 8 .. .. .. .. e (1923, No. 21, s. 79). 9.. .. .. .. e (1923, No. 21, s. 87.) 10 .. .. .. .. 185 (2). 11 .. .. .. ..159 12 .. .. .. .. R., 1941, No. 18, s. 3. 13 .. . . .. .. R., 1946, No. 38, s. 3. 1 c 1936, No. 34—The Land and Income Tax Amendment Act, 1936 Section. Clause of Bill or Reason for Omission. 1 . . . . . . a, b 2.. .. .. .. e (1923, No. 21, s. 2). 3 .. .. .. ..62 4.. .. .. .. e (1923, No. 21, s. 69). 5 (1) .. .. .. e (1923, No. 21, s. 5). 5 (2) .. .. e (1925, No. 12, s. 3). 6.. .. . . .. e (1923, No. 21, s. 74 ; 1931, No. 20, s. 3). 7.. .. .. R., 1939, No. 34, s. 32. 8.. .. .. 118, 107 (5). 9.. .. . . .. e (1923, No. 21, s. 9). 10 .. .. e (1923, No. 21, s. 96). 11 • e (1931, No. 20, s. 6). 12 (1) .. . . .. e (1932-33, No. 40, s. 4). 12 (2) .. .. e (1933. No. 43, s. 2). 13 .. . . . . .. e (1933, No. 43, s. 3). 14 . . .. . . .. R., 1940, No. 3, s. 10, 15 .. ... .. ..181 1937, No. 17 —The Finance Act, 1937 Section. Clause of Bill or Reason for Omission. 2 h 21 (1) to (4) 146 21 (5) .. .. .. h 1937, No. 36—The Finance Act (No. 2), 1937 Section. Clause of Bill or Reason for Omission. 3 .. .. .. ..143 4 (1) (2) 14 4 (3) d 5 (1) to (7) .. .. 15 5 (8) c 6(1), (2), (4) ..200 6 (3) k 7(1), (2), (4) ..241 7 (3) h 7 (5) .. ... .. d

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1938, No. 13 —The Finance Act, 1938 Section. Clause of Bill or Reason for Omission. 16 .. .. •• •• 17 .. • • • • 144 18 .. •• ..137 19 .. .. .. e (1937, No. 36, s. 5). 20 .. •• •• • • h 1939, No. 3 —The Finance Act, 1939 Section. Clause of Bill or Reason for Omission. 12 .. •• •• -ft 13 . e (1923, No. 21, s. 74). 14 " " .. .. e (1923, No. 21, s. 78). 15 '' .. .. .. d (1933, No. 43, s. 6). 16 .. .. •• •• c 17 .. .. .. R., 1939, No. 34, s. 17. 18 .. .. •• ..106 1 216 20 .. •• • • c 1939, No. 34 —The Land and Income Tax Amendment Act, 1939 Section. Clause of Bill or Reason for Omission. 1 . . . . • - / ( see Social Security Charge Bill). 2 . . .. / (see Social Security Charge Bill). 3 " .' .. R., 1950, No. 87, s. 14 (9). 4"' .. . . .. R., 1943, No. 2, s. 3. 5 .. .. e (1923, No. 21, s. 16). 6 " .. .. R-, 1940, No. 3, s. 2.. 7 .. .. e (1923, No. 21, s. 74). 8 (1) .. .. .. e (1932-33, No. 40, s. 4). 8 (2) .. .. .. e (1933, No. 43, s. 2). 8(3) .. •• .. 92 9 .. .. e (1933, No. 43, s. 3). 10 " .. . - R-, 1945, No. 37, s. 6. 11 .. 93 12 .. d, e (1923, No. 21, s. 77). 13 •• 104 14 (1) to (3) .. • • • • 102 14 (4) .. / (see Social Security Charge Bill). 15.. •• •• H 7 1 121, 107 (5) 1 H 5 18 .. • • d, e (1931, No. 20, s. 6). 19 ;; ;. .. .. e (1923, No. 21, s. 81 ; 1936, No. 34, s. 9). 20 .. • • e (1923, No. 21, s. 98). 21 .. .. •• •• 3 22 .. .. •• •• 4 23 .. .. • • .. 150 2 151

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1939, No. 34—The Land and Income Tax Amendment Act, 1939—continued Section. Clause of Bill or Reason for Omission. 2 24 26 • - • • .. 242 2 7 e (1923, No. 21, s. 102). 2 8 162 2 9 •• -- -■ -.163 3 5 31 • • • • • • ■■ e (1923, No. 21, s. 136). 3 2 (1923, No. 21, s. 80). 1940, No. 3—The Land and Income Tax Amendment Act, 1940 Section. Clause of Bill or Reason for Omission. 1 • • * • • • .. a, b. 2 23. I n \ , 9 . IMS, No. 37, s. 6. 4 t l )' ( 2 ) (1923, No. 21, s. 78). 4 (3) 197 4 (4) c 5 (!)> ( 2 ) • • • • • • e (1923, No. 21, s. 78). 5 (3) .. .. ..97 6 •• -• .. ..119 I 1945, No. 37, s. 17. 8 * • • • • • ■ • e (1939, No. 34, s. 22). ® (1939, No. 34, s. 23). 10 •• •• .. ..198 11 ■■ ■■ •• ..214 ]\ ■ •• • • - • e (1923, No. 21, s. 170). "• * • •• c 1940, No. 6—The Finance Act, 1940 Section. Clause of Bill or Reason for Omission. 12 (1) .. 131 12 ( 2 )> (3) .. .. • • g (see Social Security Charge Bill). 1940, No. 19—The Finance Act (No. 2), 1940 Section. Clause of Bill or Reason for Omission. 9 1 0 142 11 •• .. ..148 12 • • • * • • •• e (1939, No. 34, s. 23). 1940, No. 26—The Finance Act (No. 3), 1940 Section - Clause of Bill. 2 152

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1941, No. 18—The Land and Income Tax Amendment Act, 1941 Section. Clause of Bill or Reason for Omission. 1 .. .. • • / ( see Social Security Charge Bill). 2 .. .. • • / ( see Social Security Charge Bill). 3 (1) to (3) .. .. • • 138, g 3(4) .. .. ..138 3 (5) .. . - .. R., 1946, No. 38, s. 7. 3 (6), (7) .. .. .. /(see Social Security Charge Bill). 3 (8) .. .. ■• d 3 (9) • • •. .. e (1932-33, No. 42, s. 10 ; 1932, No. 8. s. 46). _ 3 (10) .. .. • • / ( see Social Security Charge Bill). 4 .. .. .. .. e (1923, No. 21, s. 97). 5.. .. .. .. e (1939, No. 34, s. 23 ; 1940, No. 3, s. 9). 6 .. .. .. .. e (i 939, No. 34, s. 23 ; 1940, No. 3, s. 9). 7.. .. .. .. e (1923, No. 21, s. 102 ; 1939, No. 34, s. 27). 8.. .. .. .. e (1940, No. 19, s. 11). 1942, No. 2—The Finance Act, 1942 Section. Clause of Bill or Reason for Omission. 2 .. .. .. .. b 3 .. .. .. c " 4.. .. .. .. R., 1946, No. 38, s. 7. 5.. .. .. .. R., 1950, No. 22, s. 4. 6 .. .. .. ..132 7 .. .. .. ..202 1942, No. 14—The Finance Act (No. 2), 1942 Section. Reason for Omission. 16 .. .. . - . - e (1938, No. 13, s. 17). 1943, No. 2 —The Finance Act, 1943 Section. Clause of Bill or Reason for Omission. 3(1) .. .. .. b 3 (2) to (4) and (7) .. .. 133 3 (5) .. .. .. R., 1950, No. 22, s. 4. 3 (6) .. .. - • f ( see Social Security Charge Bill). 3 (8) g 3 (9) .. .. .. d 3(10) .. .. .. c 1943, No. 9—The Finance Act (No. 2), 1943 Section. Reason for Omission. 8(1) .. .. .. e (1923, No. 21, s. 78). 8(2) .. .. .. c

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1943, No. 15—The Finance Act (No. 3), 1943 Section. Clause of Bill or Reason for Omission. 8 -. .. .. .. e (1923, No. 21, s. 16 ; 1939, No. 34 ; s. 5). 9 .. .. .. ..27 1944, No. 28 —The Land and Income Tax Amendment Act, 1944 Section. Clause of Bill or Reason for Omission. 1.. .. .. .. a, b 2 8 3 .. .. .. .. 9 4.. .. .. .. e (1923, No. 21, ss. 2, 69, 70, 78). 5.. .. .. .. e (1923, No. 21, s. 74; 1939, No. 34, .s. 7). 6.. .. .. .. 111, 107 (5). 7.. .. .. .. e (1934, No. 31, s. 8). 8 (1), (2) 239 8(3) .. .. .. d,h. 9.. .. .. .. e (1923, No. 21, s. 2). 1945, No. 37—The Land and Income Tax Amendment Act, 1945 Section. Clause of Bill or Reason for Omission. 1 .. .. .. a, b 2 c 3 . .. .. e (1932-33, No. 40, s. 4). 4 .. .. .. .. ' e (1933, No. 43, s. 2). 5.. . . .. .. e (1933, No. 43, s. 3). 6• • • . .. .. d, e (1933, No. 43, s. 3 ; 1939, No. 34, s. 11). 7• ■ •. -. .. e (1939, No. 34, s. 11). 8 - ■ .. . . e (1923, No. 21, s. 78). 9•. .. .. .. e (19.23, No. 21, s. 102). 10 .. . . .. . . e (1939, No. 34, s. 13). 11 .. .. .. ..126 12 .. .. .. .. 127, 107 (5). 13 .. .. .. .. 128 14 .. .. .. ..129 15 .. .. .. .. 108 16 .. .. .. .. e (1923, No. 21, s. 80). 1 h 18 .. .. .. .. e (1923, No. 21, s. 81). 19 .. .. .. ..229 1946, No. 38—The Land and Income Tax Amendment Act, 1946 Section. Clause of Bill or Reason for Omission. 1.. .. .. .. a, b 2.. .. .. .. e (1939, No. 34, s. 11.) 3(1) .. .. .. d 3 (2) .. .. • • / (see Social Security Charge Bill). 3 (3) c 4 .. .. .. ..164 5 .. .. .. ..160 6 (1) g (cf. 240). 6(2) d 7.. .. .. .. d, e (1939, No. 34, s. 23 ; 1941, No. 18, ss. 3, 5).

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1947, No. 6 —The Finance Act, 1947 Section. Reason for Omission. 9 .. .. .. R„ 1950, No. 87, s. 14 (9). 10 .. e (1939, No. 34, s. 23). 1947, No. 45—The Finance Act (No. 2), 1947 Section. Clause of Bill or Reason for Omission. 9 .. ..101 10 .. e (1923, No. 21, ss. 151, 159). H .. .. .. e (1945, No. 37, s. 15). 1948, No. 78—The Finance Act (No. 2), 1948 Section. Clause of Bill or Reason for Omission. 8 .. .. • • • • b 9 (i) ~ .. e (1923, No. 21, s. 78 ; 1933, No. 43, s. 4). 9(2) .. •• •• d 9 (3) .. • • •• o 10 (1) .. ■. • • e (1923, No. 21, s. 80). 10 (2) .. • • .. e (1939, No. 34, s. 22). 10 (3) . • • • • • 4, 107. 10 (4) .. •• • • o 1 • - 234 12 .. .. e (1923, No. 21, s. 163); cf. 233. 13 (i) .. e (1933, No. 43, s. 3; 1945, No. 37, s. 6). 13 (2) c 14 (i) .. e (1945, No. 37, s. 15; 1947, No. 45, s. 11). 15 .. .. .. e (1945, No. 37, s. 19). 1949, No. 29—The Land and Income Tax Amendment Act, 1949 Section. Clause of Bill or Reason for Omission. 1 . . . . . . .. a, b 2 .. •• •• •• c 3 . . e (1939, No. 24, s. 21). 4 " .. e (1939, No. 24, s. 13 ; 1945, No. 37, s. 10). 5 .. .. R., 1950, No. 87, s. 7 (2). 6 . • • 124, 107 (5). 7 .. .. 125 8 -123 9 (1) to (3) .. . • • • 122 9 (4) .. .. .. e (1939, No. 34, s. 16). 1950, No. 22—The Land and Income Tax Amendment Act, 1950 Section. Reason for Omission. 1 .. .. • - .. a, b 2 .. .. -• •• c 3 .. .. .. e (1923, No. 21, s. 49). 4 .. .. •• •• e

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1950, No. 87 The Land and Income Tax Amendment Act (No. 2), 1950 Section. Clause of Bill or Reason for Omission. 1 • • • .. a, b 2 3 • • • ■ • • • • e (1923, No. 21, s. 2). 4 •• .. ..87 5 • • • • • • •• ■ e (1923, No. 21, s. 78). ® • • • • •• e (1939, No. 34, s. 11). I ■ ■ • • ■■ ■■ d,e (1945, No. 37, s. 15). 8 109 ,5? HO, 107 (5). 1° 136, d 11 130 J 2 (1923. No. 21, s. 89). I 3 103 U 134, d 15 174 l 0 • • • • • • • - e (1937, No. 36, ss. 6, 7).

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Hon. Mr. Bowden LAND AND INCOME TAX ANALYSIS

Title. 1. Short Title and commencement. 2. Interpretation. 3. Defining when a company is under the control of any persons. 4. Meaning of expression " dividends." 5. Application to Cook Islands. PART I Administration 6. Commissioner and Deputy Commissioner of Taxes. 7. Powers of Deputy Commissioner. 8. Second Deputy Commissioner of Taxes. " 9. Superintendents. 10. Appointment of other officers. 11. Officers to maintain secrecy. PAT?T TT Returns and Assessments 12. Annual returns by taxpayers for purposes of land tax. 13. Annual returns by taxpayers for purposes of income tax. 14. Returns to annual balance date. 15. Consequential adjustments on change in return date. 16. Returns by partners, cotrustees, and joint adventurers. 17. Commissioner may in certain eases demand special returns and make special assessments. 18. Other annual returns. 19. Dates by which returns to be furnished. 20. Commissioner may require other returns to be made. 21. Presumption as to authority.

22, Commissioner to make assessments. 23. Basic rates of income tax. 24. Arbitrary assessment where business controlled by nonresidents appears to produce insufficient taxable income. 25. Assessment where default made in furnishing returns. 26. Amendment of assessments. 27. Reassessment for income tax where return date is between 31st March and Ist October. 28. Limitation of time for amendassessment. Validity of assessments not affected by failure to comply Act. Except m proceedings on objection, assessments deemed ?° rrec^Evidence of returns and assessments. 32. Notice of assessment to taxpayer. 33. Returns by executors or administrators. PART 111 Objections to Assessments 34. Objections to assessments, how originated. 35. Commissioner may amend assessment, or objection may be submitted to Magistrate. 36. Hearing of objections by Magistrate. 37. Burden of proof on objector. 38. Costs. 39. Court may confirm,' cancel, or alter assessment. 40. Appeals to Supreme Court. 41. Notice of appeal to Supreme Court.

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42. Magistrate to state case on appeal. 43. Appellant to transmit ease to Registrar of Supreme Court. 44. Amendment of case stated. 45. Appeal to Court of Appeal. 46. Costs on appeal. 47. When objection may be referred in first instance to Supreme Court. 48. Obligation to pay tax not suspended by objection or appeal. 49. Determination of objection not to affect other land or income. 50. Application of provisions as to objections. PAST IV Valuation of Land 51. Assessment of land tax. 52. 11 Unimproved value 7 ' and " improvements " defined. 53. Unimproved value shown on ! district roll to be adopted. 54. Value of minerals and trees to be excepted from unimproved ! value. 55. Apportionment of unimproved value. 56. Special valuation on request of Commissioner. 57. Mode of determining unimproved value at date other than 31st March. PAET V Land-tax 58. Land tax imposed. 59. Land tax to be levied on total unimproved value less exemptions. 60. Alternative exemption in cases of hardship or widows with dependent children. 61. Land tax on unimproved land. | 62. Assessment of lessees for land j tax. 63. Liability of life tenant. 64. Joint owners to be assessed jointly. 65. Joint owners to be severally assessed also. 66. Limitation of special exemptions in cases of joint ownership. 67. Liability of shareholders of company. 68. Two or more companies with substantially the same shareholders. I

. ! 69. Liability of joint occupiers. I 70. Liability of buyer in possession, i j 71. Seller to remain liable until possession delivered. | 72. No disposition of land to exempt from tax while possession retained. 73. Liability of equitable owners. 74. Liability of trustees. | 75. Liability of mortagees in possession. ! 76. Assessment upon disposal before payment date. 77. Adjustment in cases of double taxation. : 78. Increase of land tax of absentee taxpayers, i 79. Notice to Commissioner of change of ownership of land. j 80. Exemption of certain classes of land. I 81. Reduction of tax in respect of land held by religious society. | 82. Liability of Maori for Maori land. * PART VI Income Tax 83. Meaning of '' absentee ''. 84. Income tax imposed. 85. Rates to be fixed by annual taxing Act. 86. When non-assessable income to be taken into account. 87. Special rebate to persons of sixty-five years. Special Exemptions 88. Special exemption of £2OO. 89. Special exemption for married man. 90. Special exemption for married woman supporting husband. | 91. Special exemption for widowed or divorced taxpayer employing housekeeper. 92. Exemption in respect of housekeeper when marriage of taxpayer terminated during income year. 93. Special exemptions for support of dependent relatives. 94. Special exemption in respect of life insurance premiums and superannuation and insurance fund contributions. .95. Special exemption in respect of certain stamp duty. 96. Special exemption in respect of interest tax.

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General Exemptions i 97. Incomes wholly exempt from taxation 98. Exemption' from income tax of profits derived within Eoss Dependency Assessable Income and Deductions 99. Items included in assessable income. 100. Value of board, lodging, and house allowances. 101. Power to exempt employees' allowances. 102. Income derived from use or occupation of land. 103. Assignments or settlements of income. 104. Aggregation of incomes of husband and wife. 105. Income credited m account or otherwise dealt with. 106. Capitalization of mortgage interest. 107. Deductions for repair, maintenance, and depreciation. 108. Special depreciation allowance on buildings and plant. 109. Initial depreciation allowance on farm equipment and accommodation for farm workers. 110. Deduction of certain expenditure 011 land used for farming or agricultural purposes. 111. Deductions for deferred maintenance. 112. Other deductions not permitted from assessable income. 113. Deduction of expenditure or loss from income. 114. Losses incurred may be set off against future profits. 115. Amounts remitted to be taken into account in computing income. 116. Apportionment of income received in anticipation. 117. Expenditure incurred in borrowing money or obtaining lease. 118. Deduction in respect of premium paid on account of leased machinery. 119. Year in which land tax is deductible. 120. Income derived from disposal of trading stock. 121. Valuation of trading stock, including livestock. 122. Sale of trading stock for inadequate consideration. 123. Spreading of excess income derived on sale of livestock where unduly low standard values adopted.

124. Farmers' expenditure on tree , _ „ planting. . Spreading ox income derived | rom sale of timber from mS- . n kums received from sale or patent rights. 127 ■ Deduction for sums expended on purchase or patent rights. 12 8. Deduction for patent expenses. 129. Deduction for scientific research. 130. Deduction of testamentary annuities charged on property. 13L Contributions by Ministers of the Crown to salarv pool. 132 Contributions to employees' superannuation or benefit fund. 133. Payments to employees or former employees while on naval, military, or air service. ] ,'54. Income tax and social security charge payable by members 0 f emergency force. . . „ , „ Provisions Relating to Companies and Associations 135. Companies carrying on business in Pacific islands, 136. Profits of mutual associations in respect of transactions with members. 137. Deductions in respect, of payments by certain dairy companies to rationalization reserves. 138. Assessment of banking companies. 139. Insurance companies other than life insurance companies. 140. Assessment of life insurance companies. 141. Partial exemption of life insurance companies, 142. Companies engaged in mining for gold, mercury, or scheelite. 143. Assessment of petroleum mining companies. 144. Further provisions with respect to petroleum mining companies. 145. Two or more companies with substantially the same shareholders or under the same control. 146. Liability of new companies for tax payable by former companies with substantially the same shareholders or under the same control-. 147. Floating rate of interest on debentures. 148. Interest on debentures issued in substitution for shares.

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149. Payments to shareholders and debentureholders in certain eases. in certain cases assessable to shareholders. 151. Excessive remuneration by proprietary company to shareholder, director, or relative. 152. Temporary relief for proprietary companies establishing new industries. Country of Derivation of Income 153. Liability for assessment of income derived from New Zealand and abroad. 154. Place of residence, how determined. 155. Classes of income deemed to be derived from New Zealand. 156. Commission agency contracts performed out of New Zealand. 157. Apportionment where income derived partly in New Zealand and partly elsewhere. 158. Exemption of income chargeable with tax in other British dominion. 159. Reciprocal arrangements for exemption of non-resident traders. 160. Arrangements for relief from double taxation of income. Income Derived by a Trustee 161. Special provisions with respect to trustees. 162. Income received by trustee after death of deceased person. 163. Income derived in trust for Maoris. 164. Income . derived from Maori land being developed under Part I of Maori Land Amendment Act, 1936. PART VII Agents and Non-residents Interpretation 165. 11 Absentee " defined. Agents Generally 166. Rate and amount of tax payable by agent. 167. Liability of principal not affected. 168. Agent may recover tax from principal.

I 169. Agent may retain from moneys of principal amount required for tax. • 170. Assessment deemed authority for payment of tax by agent. 171. Agents to be personally liable for payment of tax. 172. Agent to make returns and be assessed as principal. 173. Kelation of principal and agent arising in effect. Special Cases of Agency 174. Liability of mortgagee in possession. 175. Guardian of person under disability to be Ms agent. 176. Person having control of land or of rents and profits to be agent of absentee or person under disability. 177. Company deemed agent of debentureholders. 178. Modification of agency provisions in respect of income from company debentures. 179. Local and public authorities to be agents of debentureholders. 180. Modification of agency provisions in respect of income from local or public authorities ' debentures. 181. Eecovery of income tax payable in respect of alimony or maintenance. Agents of Absentees and Nonresidents 182. Liability of agent of absentee principal for returns and tax. 183. Partner of absentee deemed agent. 184. Master of ship deemed agent of absentee owner. 185. Tenant, mortgagor, or other debtor to be agent of absentee landlord, mortgagee, or other creditor. 186. Person having control of land or of rents and profits to be agent of absentee owner. 187. Person having disposal of income deemed agent. 188. Company to be agent of absentee shareholders. 189. Banking company to be agent of absentee depositors. 190. Premiums on insurance effected with persons not carrying on business in New Zealand. 191. Liability as agent of employer of non-resident taxpayer and employer's agent.

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192. Non-resident trader to be agent j of employees in New Zealand. ! 193. Agents in New Zealand of j principals resident or carry- | ing on business abroad. 194. Non-resident agents or traders not to carry on business without warrant. 195. Commissioner may require nonresident agent or trader.to give security. PAET VIII Payment and Recovery of Tax 196. Governor-General in Council to fix dates for payment of taxes. 197. Payment of income tax by ; public authorities. 198. Payment of income tax by j instalments. 199. Allowance by way of interest on income tax paid in advance. 200. If default made in payment of tax, additional amount I to be charged. 201. Mode of recovery of unpaid 1 tax. 202. Deduction of income tax from payments due to defaulters, j 203. Procedure in Supreme Court j where defendant absent from j New Zealand. 204. Procedure in Magistrate's Court where defendant absent from New Zealand. 205. Notice of intention to defend in Magistrate's Court. 206. Particulars of claim or demand. 207. Commissioner may appear in legal proceedings by officer of Public Service. 208. Costs against Commissioner. 209. Proceedings not affected by J vacancy or change in office of Commissioner. 210. No limitation of action to recover tax. 211. Crown proceedings Act not affected. 212. Provisions where name of owner of land not known. 213. Recovery of land tax from persons other than owner of land. 214. Unpaid land tax to constitute a charge on land. 215. Recovery of tax paid by one person on behalf of another. 216. Payment of income tax and social security charge by persons leaving New Zealand"

PART IX Penalties | 217. Penalty for failure to furnish returns, &c. 218. Fines recoverable summarily. 219. Information may be laid within ten years. 220. Penal tax in case of evasion. 221. Nature of penal tax. 222. Assessment of penal tax. 223. Objections to penal tax. 224. Eecovery of penal tax. 225. Eecovery of penal tax from executors or administrators. 226. Amendment of assessment of penal tax. 227. Limitation of time for assessment of penal tax. 228. Eecovery of penal tax not affected by conviction of taxpayer. | 229. Publication of names of tax evaders. PAET X General 230. Conduct of inquiries by Commissioner, j 231. Commissioner to have aceess to premises and documents. 232. Commissioner to compile register of bearer debentures and other securities. J 233. Information to be furnished on request of Commissioner. | 234. Keeping of business records. 235. Employers to make returns as to employees. 236. Eeturns of interest paid on deposits. 237. Eeturns as to debentures and interest thereon. 238. Declarations to be exempt from stamp duty. I 239. Excess tax may be repaid within four years. I 240. Eefund of income tax paid on income subsequentlv exempted by Order in Council. 241. In cases of serious hardship Commissioner may grant relief to taxpayer. 242. Appointment of special committee to consider objections to arbitrary assessments of income tax. 243. Agreements purporting to alter incidence of taxation to be void. 244. Debentures issued free of income tax. | 245. Eegulations. 246. Power to extend time for doing anything under Act. 247. Eepeals and savings. 248. Consequential amendments. Schedules.

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A BILL INTITULED An Act for the Compilation of Certain Enactments Relating to Land Tax and Income Tax. BE IT ENACTED by the General Assembly of New Zealand in Parliament assembled, and by the authority of the same, as follows: —

Title.

Short Title and commencement.

1. (1) This Act may be cited as the Land and Income Tax Act, 1951. (2) This Act shall come into force on the first day of April, nineteen hundred and fifty-two.

2. In this Act, except where a contrary intention appears,— '' Agent ' 7 means any person declared by this Act to be an agent for the purposes of land tax or of income tax, as the case may be: " Annual rates " means the rates of income tax fixed for any year of assessment by the annual taxing Act for that year: " Annual taxing Act " means an Act by which the rates of land tax or income tax are determined for any year: " Assessable income " means income of any kind which is not exempted from income tax otherwise than by way of a " special exemption : 7 expressly authorized as snch by this Act: " Basic rates " means the rates of income tax specified in the First Schedule to this Act: " Business " includes any profession, trade, manufacture, or undertaking carried on for pecuniary profit: " Charitable purpose " includes every charitable purpose, whether it relates to the relief of poverty, the advancement of educational religion, or any other matter beneficial to the community: " Company " means any body corporate, whether incorporated in New Zealand or elsewhere, but does not include a local or public authority: " Debentures " includes debenture stock, and " debentureholder " includes the owner of debenture stock:

Interpretation. 1923, No. 21, s. 2 1926, No. 18, s. 12 (4) 1931, No. 31, s. 558 1935 No. 32, s. 7 (3) 1936, No. 34, s. 2 1939, No. 34, s. 22 1940, No. 3, 88.2 (1), 4 (2) 1944, No. 28, ss. 4, 9 1947, No. 57, s. 90 (lj 1947, No. 59, Pt.l 1950, No. 22, s. 4 1950, No. 87, s. 3

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" Encumbrance " means in respect of an estate or interest in land any trust, contract, easement, condition, or contingency affecting the same, and any restriction, howsoever imposed, on the owner's power of user, alienation, or disposition : " Estate " or " Interest " means any estate or interest in land, whether legal or equitable, and whether vested or contingent, in possession, reversion, or remainder, and includes any right to the possession of land or to the receipt of the rents or profits thereof, or to the proceeds of the sale or other disposition thereof, whether immediate or through a trustee, or otherwise howsoever, but does not include a-mortgage: '' European '' means. any person other than a Maori, and includes a body corporate: "Foreign company " means any company other than one incorporated in New Zealand: "Friendly society " means any society registered or incorporated in New Zealand under any Act relating to friendly societies, industrial unions, industrial associations, or trade unions: " Income year " means, in respect of the income of any person, the year in which that income has been derived by him: " Land owned " means an estate or interest owned in land, or deemed to be so owned by virtue of the provisions of this Act: " Lease " means any disposition whatever by which a leasehold estate is created: " Leasehold estate " includes any estate, howsoever created, other than a freehold estate: " Local authority " means a borough, county, and other body corporate possessing rating powers in New Zealand, and any Harbour Board, Hospital Board, Education Board, or other incorporated instrument of local government in New Zealand, whether possessing rating powers or not: " Maori " means a person who is a Maori within the meaning of the Maori Land Act, 1931:

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" Maori land " means Maori freehold land within the meaning and for the purposes of the Maori Land Act, 1931: " Minerals " includes all minerals, metals, coal, oil, kauri glim, clay, stone, gravel, sand, and precious stones: " Mortgage " means any mortgage, charge, or other security whether legal or equitable, and includes any rent charge or annuity, and for the purposes of this definition all unpaid purchase money in respect of any estate or interest in land shall be deemed to be charged thereon: • *' Mortgagee '' means the owner of a mortgage: " New Zealand company " means a company incorporated in New Zealand: " Non-resident agent " means an agent within the meaning of this Act who, being in New Zealand, has no . fixed and permanent place of business or abode there: " Non-resident trader " means any person who, being in New Zealand, carries on business there without having any fixed and permanent place of business or abode there: " Notice " means a notice in writing given by causing the same to be delivered to any person, or to be left at his usual or last known place of abode or business in New Zealand or elsewhere, or to be sent by post addressed to such usual or last known place of abode or business, or if there are several such places of business, then to any of them: *' Owner of land '' means a person who is the owner, or is deemed by virtue of this Act to be the owner, of any estate or interest in land, whether separately or jointly or in common with any other person; and " to own land " means to be an owner of land as so defined: 1 ' Person '' includes a company and a local or public authority: " Possession " includes any use which is in fact or effect substantially exclusive, whether by virtue of a right of exclusive occupation or not:

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" Prescribed " means prescribed by regulations under this Act or by the Commissioner: " Public authority " means the Public Trustee, the Maori Trustee, and every other Department or instrument of the Executive Government of New Zealand, and includes the Christmas Island Phosphate Commission, incorporated in Australia by the Christmas Island Agreement Act, 1949, of the Parliament of Australia: " Shareholder " includes any member of a company, whether the capital of that company is divided into shares or not; and " share " includes any interest in the capital of a company: " Superannuation fund " means the Government Superannuation Fund, and any superannuation fund established under the Local Authorities Superannuation Act, 1908, and includes any superannuation fund established for the benefit of the employees of any employer and approved for the time being by the Commissioner for the purposes of this Act: " Tax " means land tax or income tax: '' Taxable income '' means the residue of assessable income after deducting the amount of all special exemptions to which the taxpayer is entitled: '' Taxpayer '' means a person chargeable with land tax or income tax, as the case may be, whether on his own account or as the agent or trustee of any other person, and includes the executor or administrator of a deceased taxpayer: " Trustee " includes an executor and administrator, and also includes the Public Trustee and the Maori Trustee: " Year " means a year commencing on the first day of April and ending on the thirty-first day of March, both of these days being included: " Year of assessment " means the year for which land tax or income tax is payable.

3. (1) For the purposes of this Act a company shall be deemed to be under the control of the persons by whom more than one half of the shares or more than one half of the voting power is held, or who have by any other means whatsoever control of the company.

Defining when a company is under the control of any persons. 1939, No. 34, s. 21 1949, No. 29, s. 3

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(2) For the purposes of paragraph (a) of subsection one of section one hundred and fifty hereof, where a company is not under the control of any one person, the company shall be deemed to be under the control of not more than four persons if there is any one group of persons not exceeding four in number by whom more than one half of the shares or more than one half of the voting power in the company is held, or who have by any other means whatsoever control of the company, notwithstanding that there may also be another group of persons not exceeding four in number by whom more than one half of the shares or more than one half of the voting power in the company is held, or who have by any other means whatsoever control of the company, or that there may be two or more such other groups. (3) Where a nominee of any person holds any shares or voting power in a company or has by any other means whatsoever any power of control in the company, then, for the purposes of this section, those shares or that voting power or that power of control shall be deemed to be held by that person, and in every such case that person and his nominee or that person and all his nominees shall be deemed to be one person. (4) In this section the term " person " includes a company and a local or public authority. (5) In this section the term " nominee ", in relation to any person, means any other person who may be required to exercise his voting power in relation to any company in accordance with the direction of that person, or who holds shares or debentures directly or indirectly on behalf of that person; and includes the husband or wife of that person and any relative of that person by blood, marriage, or adoption.

4. For the purposes of this Act the expression " dividends in relation to any company, shall be deemed to include — (a) All sums distributed in any manner and under any name among all or any of the shareholders of the company: (b) Any credit given by the company without fully adequate consideration in money or money's worth to any of its shareholders in respect of the amount unpaid on any. shares that are not fully paid up:

Meaning of expression " dividends 1939, No. 34, s. 22 1948, No. 68, s. 10 (2)

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(c) The value of any shares allotted by the company to any of its shareholders as such to the extent to which that value exceeds the value of the consideration in money or money's worth (if any) paid or given by the shareholders to the company in respect of the shares so allotted: (d) The value of any other property of any kind whatsoever distributed by the company to any of its shareholders as such: (e) All amounts received by any shareholder in respect of his shares (whether in money or money's worth) upon the winding up of the company in excess of the amount paid up on his shares: (/) Where any property of the company is sold or otherwise disposed of to a shareholder without consideration or for a consideration which in the opinion of the Commissioner is less than its market price or its true value, the excess of the market price of that property on the day it was sold or disposed of over the price (if any) realized on the sale or disposition or, if there is no market price, the excess of the price deemed to have been realized pursuant to a determination of the Commissioner under paragraph (b) of subsection two of section one hundred and seven hereof over the price (if any) realized on the sale or disposition, and it shall be a ground for an objection to an assessment of income tax under Part 111 of this Act that any determination of the Commissioner made for the purposes of this paragraph is erroneous in fact, — and, subject to the taxpayer's right of objection to the Commissioner's assessment in accordance with the provisions of Part 111 of this Act, shall also include any moneys advanced by the company to or for the benefit of any of its shareholders if, in the opinion of the Commissioner, the making of the advance was not a bona fide investment by the company but was virtually a distribution of profits, but shall not in any case include any payment or other transaction which, in the opinion of the Commissioner, is or is equivalent to a return of share capital:

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Provided that where any moneys advanced by a company to or for the benefit of any shareholder and deemed by virtue of this section to constitute a dividend are subsequently repaid to the company, the Commissioner may amend in such manner as may be thereby rendered necessary the assessment made in respect of income derived by that shareholder during the income year in which the advance was made, and may at any time refund any tax found to have been paid in excess of the amount properly payable, notwithstanding anything to the contrary in section two hundred and thirtynine hereof: Provided also that in any case the Minister of Finance may, upon the recommendation of the Commissioner, direct that the expression dividends " shall be deemed not to include any payment or other transaction to the extent to which, in the opinion of the Commissioner, that payment or transaction constitutes a return to shareholders of premiums paid to the company in respect of the issue of share capital by the company. 5. Notwithstanding anything to the contrary in the Cook Islands Act, 1915, the provisions of this Act, in so far as they relate to income tax, shall apply to the Cook Islands in the same manner in all respects as if the Cook Islands were for all purposes part of New Zealand, and for the purposes of this section the term " New Zealand " as used in this Act shall, both in New Zealand and in the Cook Islands, be construed as including the Cook Islands accordingly.

Application to Cook Islands. 1939, No. 34, s. 30

Commissioner S™ZIoL Of Taxes. 1923,N0. 21, S. 3

Powers of Commissioner. 1923, No. 21, s. 4

PART I Administration 6. For the due administration of this Act there shall £ om time to time be appointed a fit person to be the Commissioner of Taxes (hereinafter referred to as the Commissioner), and a like person to be the Deputy Commissioner of Taxes (hereinafter referred to as the Deputy Commissioner). 7. (1) The Deputy Commissioner shall, under the cont . rol of the Commissioner, perform such general duties a s he is called upon to perform under this Act or by the Commissioner.

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(2) On the occurrence from any cause of a vacancy in the office of Commissioner (whether by reason of death, resignation, or otherwise), and in case of the absence from duty of the Commissioner (from whatever cause arising), and so long as such vacancy or absence continues, the Deputy Commissioner shall have and may exercise all the powers, duties, and functions of the Commissioner. (3) The fact of the Deputy Commissioner exercising any power, duty, or function as aforesaid shall be conclusive evidence of his authority so to do, and no person shall be concerned to inquire whether the occasion has arisen requiring or authorizing him so to do. (4) So far as regards the assessment and recovery of any tax with which the person holding office as Commissioner may be chargeable under this Act, all references in this Act to the Commissioner shall be construed as references to the Deputy Commissioner. 8. (1) There shall from time to time be appointed an officer of the Public Service to be called the Second Deputy Commissioner of Taxes (hereinafter referred to as the Second Deputy Commissioner) who shall, under the control of the Commissioner, perform such general official duties as he is called upon to perform under this Act or by the Commissioner. (2) On the occurrence from any cause of a vacancy in the office of Deputy Commissioner (whether by reason of death, resignation, or otherwise) and in •case of the absence from duty of the Deputy Commissioner (from whatever cause arising) and so long as such vacancy Or absence continues, the Second Deputy Commissioner shall have and may exercise all the powers, duties, and functions of the Deputy Commissioner. For the purposes of this section the powers, duties, and functions of the Deputy Commissioner shall be deemed to include such of the powers, duties, and functions of the Commissioner as the Deputy Commissioner may for the time being be authorized to •exercise. (3) The fact of the Second Deputy Commissioner exercising any power, duty, or function as aforesaid shall be conclusive evidence of his authority so to do, and no person shall be concerned to inquire whether the occasion has arisen requiring or authorizing him so to do.

Second Deputy Commissioner of Taxes. 1944, No. 28, s. 2

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9. (1) There shall from time to time be appointed as many officers of the Public Service, to be called Superintendents, as may be fonnd necessary for the administration of this Act. (2) A Superintendent shall, subject to the control of the Commissioner, perform such general official duties as he is called upon to perform under this Act or by the Commissioner. (3) With the approval of the Minister of Finance, the Commissioner may from time to time, either generally or particularly, by writing under his hand delegate to any Superintendent all or any of the powers and functions of the Commissioner. (4) Subject to any general or special directions given or conditions imposed from time to time by theCommissioner, a Superintendent to whom any powersor functions are so delegated may exercise and perform them in the same manner and with the same effect as if they had been directly conferred on him by this Act and not by delegation. (5) Every person purporting to act pursuant to any delegation under this section shall be presumed to be acting in accordance with the terms of the delegation unless and until the contrary is proved. (6) Any delegation under this section may be made to a specified person or to specified persons holding the office of Superintendent, or to all persons for the time being holding that office, or to any class or classes of such persons. (7) Unless and until any such delegation is revoked it shall continue in force according to its tenor. In the event of the Commissioner by whom any such delegation has been made ceasing to hold office it shall continue to have effect as if made by the person for the time being holding office as Commissioner and, in the event of any Superintendent to whom any such delegation has been made ceasing to hold office, it shall continue to have effect as if made to the person for the time being holding the office of that Superintendent or for the time being exercising the functions of that office. (8) The delegation by the Commissioner of any powers or functions under this section shall not prevent the personal exercise of those powers or functions bv the Commissioner.

Superintendents. 1944, No. 28, s. 3

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10. There shall be appointed from time to time such assessors, clerks, receivers, and other officers as are necessary for the purpose of carrying out the provisions of this Act.

Appointment of other officers. 1923, No. 21, s. 5

11. (1) Every person appointed or employed under this Act — (a) Shall maintain and aid in maintaining the secrecy of all matters relating to this Act which come to his knowledge, and shall not communicate any such matters to any person, except for the purpose of carrying into effect this Act, or any other Act imposing taxes or duties payable to the Crown; and also (b) Shall, before he begins to perform any official duty under this Act, take and subscribe such oath of fidelity and secrecy as is prescribed, which oath may be administered by the Commissioner or Deputy Commissioner, or by any Justice. (2) Every person who wilfully acts in contravention of the true intent of such oath is liable, on summary ■conviction before a Magistrate, to imprisonment for any term not exceeding six months, or to a fine not exceeding one hundred pounds.

Officers to maintain secrecy. 1923, No. 21, s. 5

PART II Returns and Assessments 12. For the purposes of the assessment and levy of land tax every taxpayer shall in each year furnish to the Commissioner a return in the prescribed form setting forth a complete statement of all land in respect whereof he is assessable for land tax, as owned by him at noon on the thirty-first day of March in the preceding year, together with such other particulars as may be prescribed.

Annual returns by taxpayers for purposes of land tax. 1923, No. 21, s. 7

13. For the purposes of the assessment and levy of income tax every taxpayer shall in each year furnish to the Commissioner a return in the prescribed form setting forth a complete statement of all the assessable income derived by him during the preceding year, together with such other particulars as may be prescribed.

Annual returns by taxpayers for purposes of income tax. 1923, No. 21, s. 8

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14. (1) In lieu of furnishing a return in accordance with the provisions of the last preceding section for any year ending on the thirty-first day of March, any taxpayer may with the consent of the Commissioner, elect to furnish a return for the year ending on the date of the annual balance of his accounts, and in any such case the income derived during that year shall for the purposes of the principal Act be deemed to have been derived during the year ending on the thirty-first day of March nearest to that date. (2) For the purposes of this and the next succeeding section the thirtieth day of September in any year shall be deemed to be nearer to the last preceding thirty-first day of March than to the next succeeding thirty-first day of March. (3) Any election made by a taxpayer for the purposes of this section shall continue in force unless and until it is altered by the taxpayer with the prior approval in writing of the Commissioner.

Returns to annual balance date. 1937, No. 36, 5.4

15. (1) In this section— The expression " the return date " means the last day of the period for which a return of income is required to be made: The expression " the original return date " means, in the case of a taxpayer who has changed his return date, whether before or after the passing of this Act, the return date immediately prior to the new return date: The expression " the new return date " means, in the case of a taxpayer who has changed his return date, whether before or after thepassing of this Act, the date to which the change was made or, if he has made more than one change, means the date to which the last change was made. (2) If, in any case the new return date is an earlier date than the original return date, the taxpayer shall furnish a return for the period intervening between the original return date and the new return date in the next succeeding year, and if the new return date is a later date than the original return date, the taxpayer shall furnish a return for the period intervening between the original return date and the new return date in the same year. For the purposes of this subsection,.

Consequential adjustments on change in return date. 1937, No. 36, s. 5 1938, No. 13, s. 19

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one date shall be earlier than another if it is earlier in the calendar year notwithstanding that it may not be earlier in the financial year. (3) All returns of income made in accordance with the last preceding subsection shall be deemed to be returns of income derived during the year ending on the thirty-first day of March nearest to the new return date, and the income derived by the taxpayer during that period shall, for the purposes of assessment, be added to any other income derived for the same year, and he shall be assessed and liable for income tax accordingly. (4) If in any case to which this section applies the period intervening between the original return date and the new return date does not include the first day of October next succeeding the original return date, the taxpayer shall, notwithstanding anything to the contrary in section one hundred and fourteen hereof, be entitled ©nly—(a) To have any losses incurred by him in that period and deductible in accordance with that section deducted from or set off against his assessable income for the two following years and no more; and (b) To have deducted from or set off against his assessable income derived in that period, any deductable losses incurred by him during the last preceding two years, and no more. (5) Where, for the purposes of this section, a taxpayer is assessed for income tax on a return made for a period less than a year, he shall be entitled, by way of special exemptions, only to an amount bearing to the total exemptions to which he would be entitled for a full year the same proportion as the number of days in that period bears to the number of days in a year; and where a taxpayer is assessed on a return or returns for a period more than a year, the deduction to which he is entitled by way of special exemptions shall be proportionately increased. (6) Where, for the purposes of this section, a taxpayer is assessed for income tax on a return made for a period that is less or greater than a year, the rate of the tax shall be determined as for a year, and for the purposes of this subsection the taxable and non-assessable income of a taxpayer shall be deemed

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to have been derived at a uniform daily rate throughout the period for which the return has been made and where that period is less than a year that daily rate shall be deemed to have continued for a year. (7) Where a taxpayer has been assessed for income tax on a return made to any date other than the thirtyfirst day of March in any year, the income derived by that taxpayer shall be deemed to have been assessed for tax to that date, and not to the thirty-first day of March nearest to that date. (8) For the purpose of giving effect to the provisions of this section and of the last preceding section, the Commissioner may, for any year or years of assessment, make all such assessments or additional assessments as he may deem necessary, notwithstanding anything to the contrary in this Act.

16. (1) When income is derived by two or more persons jointly as partners, co-trustees, or otherwise the following provisions shall apply:— (a) In the case of trustees, they shall make a return of that income, and shall be jointly assessable thereon and jointly and severally liable for the tax so assessed: (b) In the case of partners—(i) They shall make a joint return of the income of the firm, setting forth the amount of that income and the shares of the several partners therein: (ii) Each partner shall make a separate return of all income derived by him and not included in any such joint return: (iii) There shall be no joint assessment, but each partner shall be separately assessed and liable for the tax payable on his total income, including his share of the income of any firm in which he is a partner: (c) In any case other than that of co-trustees or partners, each person by whom income is so derived shall include in his return the amount of his share in the joint income, and shall be assessed and liable accordingly, (2) For the purposes of this Act a husband and wife carrying on business together shall not be deemed to be carrying on business as partners, unless in fact they are carrying on business under a deed of partnership.

Beturns by partners, eo-trusteea, and joint adventurers. 1923, No. 21, s. 101

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17. (1) This section applies to the following persons:— (a) An agent: (b) A non-resident trader: (c) A person who is believed by the Commissioner to be abont to leave New Zealand or to be about to discontinue the carrying on of business in New Zealand: (d) A person who has ceased to carry on business in New Zealand or to derive assessable income: (e) The execntors or administrators of a deceased taxpayer in respect of income derived by bim in his lifetime: (/) A person who has become bankrupt, or a company which is in course of being wound up. (2) The Commissioner may, if he thinks fit, at any time during the income year or in any subsequent year, and either before or after the passing of the annual taxing Act or the due date of tax, require any person to whom this section applies to make a return of income derived from any specified transaction or transactions, or during any specified period, and may assess bim for income tax on the income so returned; or when default is made in making such return, or the Commissioner is dissatisfied therewith, then on such sum as the Commissioner thinks reasonable, and shall give notice of the assessment to the person so assessed. (3) Any person so assessed shall have the same right of objection as if he had been assessed in the ordinary course. (4) Tax so assessed shall be payable on demand, which may be made in and by the notice of assessment or at any later date, and the tax shall be recoverable in the same manner as income tax assessed in the ordinary course. (5) If any such assessment of income derived in any year is made before the passing of the annual taxing Act by which the rate of tax payable on such income is fixed, the tax shall be assessed at the rate fixed by the annual taxing Act last passed before the date of the assessment. (6) No assessment made under this section shall in any manner preclude a subsequent assessment of the same person in the ordinary course in respect of the whole of the income derived by him during the income

Commissioner may in certain cases demand special returns, and make special assessments. 1923, No. 21, s. 108

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year with respect to which the assessment under this section was made, but in such case the tax paid under the earlier assessment shall be credited in the subsequent assessment.

18. In addition to the foregoing returns every person, whether a taxpayer or not, shall make to the Commissioner such annual returns as may be prescribed for the purposes of this Act.

Other annual returns. 1923, No. 21, s. 9

Dates by which returns to be furnished. 1923, No. 21, s. 10

19. (1) The above mentioned returns shall be made in each year before a date or dates of which the Commissioner gives public notice. (2) Such notice shall be given by publishing the same in the Gazette and in such other manner (if any) as the Commissioner may think necessary and sufficient.

20. In addition to the returns above mentioned every person, whether a taxpayer or not, shall, as and when required by the Commissioner, make such further or other returns as the Commissioner requires for the purposes of this Act.

Commissioner may require other returns to be made. 1923, No. 21, s. 11

Presumption as to authority. 1923, No. 21, s. 12

21. A return purporting to be made by or on behalf of any person shall for all purposes be deemed to have been made by that person or by his authority, as the case may be, unless the contrary is proved.

22. (1) From the returns made as aforesaid and from any other information in his possession the Commissioner shall in and for every year, and from time to time and at any time thereafter as may be necessary, make assessments in respect of every taxpayer, setting forth the amount upon which tax is payable and the amount of the tax. (2) Every such assessment shall be made in the form and manner prescribed by regulations, and in default of such regulations or so far as they do not extend, then as the Commissioner thinks fit, and shall be signed by him.

Commissioner to make assessments. 1923, No. 21, s. 12

Basic rates of income tax. 1940, No. 3, s. 2

23. (1) The Commissioner may in any year of assessment (whether before or after the passing of the annual taxing Act for that year) assess the income tax of any taxpayer at the basic rates. No such assessment shall be deemed to be invalid on the gronnd that it is made before the passing of the annual taxing Act.

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(2) If the annual rates for any year of assessment are higher or lower than the basic rates, the amount of every assessment of income tax made under this section in respect of that year shall be deemed to be increased or reduced accordingly, and every such assessment shall have the same effect as if the amount thereof as so increased or re.duced had been specified therein. (3) Notwithstanding anything to the contrary in this section or in the First Schedule to this Act or in any annual taxing Act, the rate of income tax for any one pound of income shall not exceed fifteen shillings and sixpence in the pound.

24. (1) Where any business carried on in New Zealand — (a) Is controlled exclusively or principally by persons not resident in New Zealand; or (b) Is carried on by a company not resident in New Zealand, or by a company in which more than one half of the shares are held by persons not resident in New Zealand; or (c) Is carried on by a company which holds, or on behalf of which other persons hold, more than one half of the shares in a company not resident in New Zealand, — and it appears from the returns made to the Commissioner that the business produces no taxable income or less than the amount of taxable income which in the opinion of the Commissioner might be expected to rise from that business, the person carrying on the business in New Zealand shall, notwithstanding anything to the contrary in this Act, be assessable for and liable to pay income tax on a taxable income of such amount as the Commissioner determines, being at the option of the Commissioner either such proportion as he determines of the total receipts (whether cash or credit) of the business or such proportion as he determines of the total purchase moneys paid or payable (whether in cash or by the granting of credit) in the conduct of the business. (2) For the purposes of this section the place of residence of any person other than a company, and the place of residence of any company, shall be determined in accordance with the provisions of section one hundred and fifty-four hereof.

Arbitraryassessment where business controlled by non residents appears to produce insufficient taxable income. 1939, No. 34, s. 25

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25. If any person makes default in furnishing any return, or if the Commissioner is not satisfied with the return made by any person, or if the Commissioner has reason to suppose that any person although he has not made a return, is a taxpayer, he may make an assessment of the amount on which in his judgment tax ought to be levied and of the amount of that tax, and such person shall be liable to pay the tax so assessed, save in so far as he establishes on objection that the assessment is excessive or that he is not chargeable with tax.

Assessment where default made in furnishing returns. 1923, No. 21, s. 14

26. (1) The Commissioner may from time to time and at any time make all such alterations in or additions to an assessment as he thinks necessary in order to ensure the correctness thereof, notwithstanding that tax already assessed may have been paid. (2) If any such alteration or addition has the effect of imposing any fresh liability or increasing any existing liability, notice thereof shall be given by the Commissioner to the taxpayer affected, who shall, unless the alteration or addition was made with his consent, be entitled to object thereto in accordance with the provisions as to objections hereinafter contained.

Amendment of assessments. 1923, No. 21, s. 15

27. Where, whether before or after the passing of this Act, — {a) Any taxpayer, in respect of income derived during any number of successive accounting periods ending respectively on a day between the thirty-first day of March and the first day of October in each year, has made returns of income and been assessed for income tax upon the basis that the income derived during each such accounting period was derived during the income year ending on the thirtyfirst day of March next succeeding the end of that accounting period; and (b) The Commissioner has altered all those assessments (or such of them as he is not precluded by section twenty-eight hereof from altering) by assessing the taxpayer upon the basis that the income derived during each accounting period was derived during the income year ending on the thirty-first day of March next before the end of that accounting period,— the validity of the altered assessment in respect of the income derived during any such accounting period shall not deemed to be affected or to have at any time

Eeassessment for income tax where return date is between 31st March and Ist October. 1943, No. 15, s. 9

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been affected by reason of its having been made for the same year of assessment as the assessment in respect of the income derived by the taxpayer during the preceding accounting period.

28. When any person has made returns and has been assessed for land tax or income tax for any year, it shall not be lawful for the Commissioner to alter the assessment so as to increase the amount thereof after the expiration of four years from the end of the year in which the assessment was made or (in any case where the returns so made are fraudulent or wilfully misleading or, in the case of returns of income, omit all mention of income which is of a particular nature or was derived from a particular source, and in respect of which a return is required to be made) after the expiration of ten years from the end of the year in which the assessment was made.

Limitation of time for amendment of assessment. 1923, No. 21 s. 16 1939, No. 34, s. 5 1943, No. 15, s. 8

29. The validity of an assessment shall not be affected by reason that any of the provisions of this Act have not been complied with.

Y alidity of assessments not affected by failure to comply with Act. 1923, No. 21, s. 17

30. Except in proceedings on objection to an assessment in accordance with the provisions hereinafter contained, no assessment made by the Commissioner shall be disputed in any Court or in any proceedings either on the ground that the person so assessed is not a taxpayer or on any other ground; and, except as aforesaid, every such assessment and all the particulars thereof shall be conclusively deemed and taken to be correct, and the liability of the person so assessed shall be determined accordingly.

Except in proceedings on objection, assessments deemed correct. 1923, No. 21, s. 18

31. The production of any document under the hand of the Commissioner or Deputy Commissioner purporting to be a copy of or extract from any return or assessment shall in all Courts and in all proceedings be sufficient evidence of the original, and the production of the original shall not be necessary, and all Courts shall in all proceedings take judicial notice of the signature of the Commisisoner or Deputy Commissioner either to the original or to any such copy or extract.

Evidence of returns and assessments. 1923, No. 21, s. 19

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32. (1) As soon as conveniently may be after an assessment is made the Commissioner shall cause notice of the assessment to be given to the taxpayer. (2) The omission to give any such notice shall not invalidate the assessment or in any manner affect the operation thereof.

Notice of assessment to taxpayer. 1923, No. 21, s. 20

Returns by executors or administrators. 1923, No. 21, s. 21

33. (1) The executor or administrator of a deceased taxpayer shall in respect of all income derived or land owned by that taxpayer in his lifetime make the same returns as the taxpayer ought to have made or would have been bound to make if he had remained alive; and the Commissioner may from time to time require the executor or administrator to make such further returns relative to that land or income as the Commissioner thinks necessary, and may assess the executor or administrator for land tax or income tax on that land or income in the same manner in which the taxpayer might have been assessed had he remained alive. (2) The tax so assessed shall be deemed to be a liability incurred by the deceased taxpayer in his lifetime, and the executor or administrator of the taxpayer shall be liable for the same accordingly.

PART 111 Objections to Assessments 34. (1) Any person who has been assessed for land tax or income tax may object to that assessment by delivering or posting to the Commissioner a written notice of objection stating shortly the grounds of his objection, within such time as may be specified in that behalf in the notice of assessment, not being less than fourteen days after the date on which that notice of assessment is given. (2) No notice of objection given after the time so specified shall be of any force or effect unless the Commissioner in his discretion accepts the same and gives notice to the objector accordingly.

Objections to assessments, how originated. 1923, No. 21, s. 22

35. The Commissioner shall consider all such objections, and may alter the assessment pursuant thereto; but an objection which is not allowed by the Commissioner shall if the objector so desires, be heard and determined in a Magistrate's Court, before a Stipendiary Magistrate alone; and the Court shall for

Commissioner may amend assessment, or objection maybe submitted to Magistrate. 1923, No. 21, s. 23

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the purpose of hearing and determining the objection, whatever the amount involved, have all the powers vested in it in its ordinary civil jurisdiction as if in an action between the objecting taxpayer and the Commissioner.

36. (1) The procedure for the institution, hearing, and determination of such proceedings in the Magistrate's Court shall be in accordance with regulations to be made under this Act, and, subject to such regulations or so far as they do not extend, shall be in accordance with the ordinary practice of that Court. (2) No objection to an assessment of income tax shall be heard by a Magistrate in open Court.

Hearing of objections by Magistrate. 1923, No. 21, s. 24

37. On the hearing and determination of all objections to assessments of land tax or income tax the burden of proof shall be on the objector, and the Court may receive such evidence as it thinks fit, whether receivable in accordance with law in other proceedings or not.

Burden of proof on objector. 1923, No. 21, s. 25

38. In such proceedings the Magistrate's Court may award such costs as it deems just either against the Commissioner or against the objector.

Costs. 1923, No. 21, s. 26

39. On the determination of any such objection the Magistrate's Court may either confirm or cancel the assessment, or increase or reduce the amount thereof, and the assessment shall be altered by the Commissioner, if necessary, so as to conform to that determination.

Court may confirm, cancel, or alter assessment. 1923, No. 21, s. 27

40. The determination of the Magistrate's Court on any such objection shall be subject to appeal to the Supreme Court on any question of law, but shall be final and conclusive as to any question of fact unless the Magistrate is satisfied that the amount of tax bona fide in dispute between the objector and the Commissioner exceeds two hundred pounds, in which case the Commissioner or the objector may appeal to the Supreme Court on any question of fact.

Appeals to Supreme Court. 1923, No. 21, s. 28

41. In case of such appeal the appellant shall, within thirty days after the determination appealed from, file in the Magistrate's Court a notice of appeal, and (except when he is the Commissioner) give security for the costs of the appeal to such amount and in such form as may be approved by a Magistrate.

Notice of ippeal to Supreme Court. 1923, No. 21, 5. 29

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Magistrate to state case on appeal. 1923, No. 21, s. 30

42. (1) The Magistrate whose determination is appealed from shall thereupon state and sign a case setting forth the facts and the questions of law arising for the determination of the Supreme Court, and shall deliver the case so signed by him to the appellant. (2) If and so far as any such appeal relates to a question of fact, the case so stated by the Magistrate shall set forth the evidence taken before the Magistrate's Court, instead of the facts as found by that Court.

43. The appellant shall, within fourteen days after receiving the case, transmit the same to a Registrar of the Supreme Court in the judicial district in which the objection was heard in the Magistrate's Court, and the Registrar shall thereupon enter the appeal for hearing at the first practicable sitting of the Court.

Appellant to transmit case to Registrar of Supreme Court. 1923, No. 21, s. 31

44. (1) On the hearing of the appeal the Supreme Court may, if it thinks fit, cause the case so stated to be sent back to the Magistrate for amendment, and thereupon the case shall be amended accordingly, and the Court shall thereupon proceed to hear and determine the questions so submitted. (2) If and so far as the appeal relates to questions of the Supreme Court may, as it thinks fit, either determine the same on the case as so stated, or take additional evidence (either orally or on affidavit), or rehear the whole case.

Amendment of case stated. 1923, No. 21, s. 32

45. Except on a question of fact, the decision of the Supreme Court on any such appeal shall be subject to appeal to the Court of Appeal, and any case so stated for the decision of the Supreme Court on a question of law only may be removed into the Court of Appeal.

Appeal to Court of Appeal. 1923, No. 21, s. 33

Costs on appeal. 1923, No. 21, s. 34

46. (1) The Supreme Court or Court of Appeal may award such costs to or against the Commissioner as it thinks just. (2) The Commissioner shall not be required to give security in any such proceedings before the Supreme Court or Court of Appeal. (3) All costs awarded against the Commissioner by the Magistrate's Court, Supreme Court, or Court of Appeal shall be payable out of moneys appropriated by Parliament, and not otherwise.

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47. (1) Notwithstanding anything hereinbefore contained, any objection made in the manner and within the time aforesaid to an assessment of land tax or income tax, if and so far as it relates to any question of law only, may, at the option of the objector, be referred directly to the Supreme Court by way of case stated in accordance with the following provisions. (2) The objector (hereinafter called the appellant) may deliver to the Commissioner together with the notice of objection, or at any time within two months after the receipt thereof by the Commissioner, a notice in writing requiring him to state a case for the opinion of the Supreme Court. (3) The Commissioner shall thereupon state and Sign a case accordingly, setting forth the facts, the questions of law to be decided, and the assessment made by him, and shall deliver the case so signed to the appellant. (4) The appellant shall, within fourteen days after receiving the case, transmit the same to the Registrar of the Supreme Court in such judicial district as the appellant thinks fit, and the Registrar shall thereupon enter the case for hearing at the first practicable sitting of the Court. (5) The provisions of sections forty-four to forty-six hereof shall extend and apply to any such case stated by the Commissioner, in the same manner, with all necessary modifications, as to a case stated by a Magistrate. (6) On the determination of any such case stated the Supreme Court may either confirm or cancel the assessment, or increase or reduce the amount thereof, and the assessment shall be altered by the Commissioner, if necessary, so as to conform to that determination.

When objection may be referred in first instance to Supreme Court. 1923, No. 21, s. 35

48. The obligation to pay and the right to receive and recover any tax shall not be suspended by any objection, appeal, or case stated; but if the objector succeeds the amount (if any) of the tax received by the Commissioner in excess of the amount which, according to the decision on the hearing of the objection, appeal, or case stated, was properly payable shall forthwith be repaid to him by the Commissioner.

Obligation to pay tax not suspended by objection or appeal. 1923, No. 21, s. 36

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49. The determination of an objection under any of the foregoing provisions shall relate solely to the land or income which is the subject of the assessment objected to, and shall not affect the right of the Commissioner to assess any other land or income of the objector, or to amend the assessment objected to in any manner rendered necessary by the assessment of such other land or income.

Determination of objection not to affect other land or income. 1923, No. 21, s. 37

50. The foregoing provisions as to objections shall have no application to an objection relating to any matter which by this Act is left to the discretion, judgment, or determination of the Commissioner, or (save so far as hereinafter expressly provided) to an objection to any valuation of land made by the ValuerGeneral under the Valuation of Land Act, 1925, or this Act.

Application of provisions as to objections. 1923, No. 21, s. 37

1925, No. 31

PART IV Valuation op Land 51. Land tax shall be assessed on the unimproved value of the land owned by the taxpayer as determined in accordance with the provisions of this Part of this Act.

Assessment of land tax. 1923, No. 21, s. 39

"Unimproved value " and "improvements" defined. 1923, No. 21, s. 40

52. (1) The unimproved value of any land so owed means the sum which the owner's estate or interest therein, if free from any mortgage or encumbrance, might be expected to realize if offered for sale on such reasonable terms and conditions as a bona fide seller might be expected to impose and if no improvements had been made on the land. (2) " Improvements " has the same meaning as in the Valuation of Land Act, 1925.

1925, No. 31

53. (1) Subject to the following provisions of this Part of this Act, if the unimproved value of any land appears on the district valuation roll in force under the Valuation of Land Act, 1925, on the thirty-first day of March in the year preceding the year of assessment, whether in the name of the taxpayer or of any predecessor in title, trustee, or other person, the unimproved value so appearing on that roll shall be deemed and be taken to be the unimproved value of that land on that day for the purposes of this Act.

Unimproved value shown on district roll to be adopted. 1923, No. 21, s. 41 1925, No. 31

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(2) When a new valuation of any land is made by the Valuer-General pursuant to section three of the Valuation of Land Amendment Act, 1933, the amended value shall for the purposes of this Act be deemed to be the value appearing on the district valuation roll on the thirty-first day of March next succeeding the date of the application for a new valuation, notwithstanding that the new valuation may not then have been actually made.

1933, No. 35, s. 3

Value of minerals and trees to be excepted from unimproved value. 1923, No. 21, s. 42 1929, No. 12, s. 4

54. (1) Notwithstanding anything hereinbefore contained, the unimproved value of land shall not for the purposes of this Act include the value of any minerals or trees. (2) The Valuer-General shall, in all cases in which the value of any minerals or trees is included in the unimproved value as shown on the district valuation roll, show separately on that roll the value so included, and in such cases the remaining value only shall for the purposes of this Act be deemed to be the unimproved value as shown on the said roll.

55. (1) If the valuation appearing on the district valuation roll relates to an area of land a part only of which is assessable for the purposes of land tax, or different parts of which are assessable at different rates or require for any reason to be separately valued for the purposes of this Act, the unimproved value as appearing on that roll shall for the purposes of this Act be apportioned in such manner as may be just and reasonable between the several parts of that area, and the value so attributed to each part shall be deemed to be the unimproved value thereof for the purposes of this Act. (2) Such apportionment shall be made as follows: (a) The Commissioner, if satisfied that the value of any such part as stated in the return made by the taxpayer represents a just and reasonable apportionment, may accept that value and make the assessment accordingly: (b) The Commissioner may agree with the taxpayer as to the apportionment to be made, and may make the assessment accordingly: (c) In default of any such acceptance or agreement the apportionment shall be made by the Valuer-G-eneral on the requisition of the Commissioner, and the assessment shall be made in accordance with that apportionment.

Apportionment of unimproved value. 1923, No. 21, s. 44

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56. (1) If, in the case of any estate or interest in land, no valuation thereof appears on the district valuation roll in force on the thirty-first day of March in the year preceding the year of assessment, or if the valuation thereof on the district valuation roll is made otherwise than in accordance with the provisions of this Act for the valuation of land for the purposes of land tax, the Valuer-Greneral shall, on the requisition of the Commissioner and for the purposes of this Act, cause a special valuation of the unimproved value of that estate or interest to be made in accordance with the provisions of this Act as at the thirty-first day of March in the year preceding the year of assessment, and the unimproved value of that estate or interest on that day shall for the purposes of this Act be determined in accordance with the valuation so made. (2) Any taxpayer who is assessed for land tax on any such special valuation shall be entitled to dispute that valuation by way of objection to the assessment, and all the provisions of this Act as to objections to assessments shall apply accordingly, save that the decision of the Magistrate on any question of fact shall be final and conclusive. (3) Save as - aforesaid, the provisions of this Act as to objections to assessments shall have no application to an objection to any valuation or apportionment by the Valuer-General in accordance with the Valuation of Land Act, 1925, or this Act.

Special valuation on request of Commissioner. 1923, No. 21, s. 45 1929, No. 12, s. 5 (3)

1925, No. 31

Mode of determining unimproved value at date other than 31st March. 1923, No. 21, s. 47

57. Whenever for the purposes of this Act it is necessary to determine the unimproved value of land at any date other than the thirty-first day of March preceding the year of assessment, such value shall be determined in accordance with the provisions of this Part of this Act, save that all references to the thirtyfirst day of March preceding the year of assessment shall be read as references to the date as at which such value is to be determined.

PABT V Land Tax 58. (1) Subject to the provisions of this Act, there shall be levied and paid, for the use of His Majesty, in and for the year commencing on the first day of April in each year, a tax herein referred to as land tax.

Land tax imposed. 1923, No. 21, s. 48

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(2) Subject to the provisions of this Act, such tax shall be payable by every person on all land of which he was the owner at noon on the thirty-first day of March preceding the year in and for which the tax is payable (herein referred to as the year of assessment). (3) Such tax shall be assessed, levied, and paid at such rate or rates as may be fixed from time to time by any Act to be passed for that purpose (herein referred to as the annual taxing Act).

59. (1) Subject to the provisions of this Act, land tax shall in the case of each owner be levied at the rate or rates aforesaid on the total unimproved value of all land so owned by him after making, by way of special exemption from that value, the deduction following, that is to say:— (a) Where that value does not exceed fifteen hundred pounds, a deduction of one thousand pounds: (b) Where that value exceeds fifteen hundred pounds, a deduction of one thousand pounds diminished at the rate of one pound for every pound of that excess, so as to leave no deduction when that value amounts to or exceeds two thousand five hundred pounds. (2) In lieu of the deduction authorized by the last 'preceding subsection, there may be .deducted as a special exemption from the total unimproved value of the land of the taxpayer, in cases where that land or any part thereof was at noon on the thirty-first day of March preceding the year of assessment subject to a mortgage or mortgages, the following amount, that is to say:— (a) Where the total unimproved value aforesaid does not exceed seven thousand five hundred pounds, the sum of seven thousand five hundred pounds: (b) Where the total unimproved value aforesaid exceeds seven thousand five hundred pounds, the sum of seven thousand five hundred pounds diminished at the rate of one pound for every one pound of that excess, so as to leave no deduction under this paragraph when that value amounts to or exceeds fifteen thousand pounds:

Land tax to be levied on total unimproved value less exemptions. 1923, No. 21, s. 49 1929, No. 12, 5.6(1) 1930, No. 8, s. 3 1950, No. 22, 5.3

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Provided that where the capital value of all mortgages owing by the taxpayer as aforesaid is less than the amount that would be deducted under paragraph (a) or paragraph (fc) of this subsection, as the case may be, the capital value of those mortgages shall be deductible in lieu of the deduction provided for by those paragraphs. (3) In this section " mortgage "means any mortgage or charge upon land, howsoever created, if registered under any Act relating to the registration of deeds or instruments affecting title to land, and includes all unpaid purchase money in respect of land purchased, and any annuity or rent charge charged upon land or secured by will and payable out of the rents and profits of land although no registered charge exists in respect thereof; but, except as aforesaid, does not include any mortgage or charge not so registered. (4) For the purposes of this section the capital value of a mortgage shall be ascertained as follows: (a) In the case of a rent charge or annuity the capital value thereof shall be the full amount of the present value of that rent charge or annuity on the thirty-first day of March preceding the year of assessment capitalized at the rate of five per cent per annum: (b) In the case of a mortgage existing at the commencement of the year preceding the year of assessment, if the principal sum secured by such mortgage at noon on the thirty-first day of March preceding the year of assessment is greater than the principal sum secured thereby at any other time during the year, the capital value of the mortgage shall be the average of the principal sums secured thereby at noon on the last day of each month of the year preceding the year of assessment: (c) In the case of any other mortgage existing at the commencement of the year preceding the year of assessment, the capital value shall be the principal sum secured thereby at noon on the thirty-first day of March preceding the year of assessment:

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{d) In the case of a mortgage executed during the year preceding the year of assessment the capital value shall be the full amount of the principal sum owing thereunder at noon on the thirty-first day of March preceding the year of assessment, reduced, except in cases to which the proviso to this paragraph relates, by the one twelfth part thereof for every month or part of a month of the year preceding the year of assessment that had elapsed before the registration of the mortgage: Provided that no deduction shall be made under this paragraph in any case where the owner acquired his interest in the mortgaged land at any time during the year preceding the year of assessment.

60. (1) In lieu of the special exemption provided for in the last preceding section, in any case where the Commissioner is satisfied that the total income of the owner from all sources, whether in New Zealand or elsewhere, during the year preceding the year of assessment did not exceed three hundred pounds, and that by reason of age, ill health, or other disability he is incapacitated from earning any further income, and that payment of the land tax in full would cause hardship, the Commissioner may allow by way of special exemption a deduction not exceeding two thousand five hundred pounds. (2) In lieu of the special exemptions hereinbefore provided for, the Commissioner may, in his discretion, where he is satisfied that a taxpayer is a widow having a child or children wholly or partly dependent on her for support, and that payment of the land tax in full would cause hardship, allow by way of special exemption a deduction not exceeding four thousand pounds.

Alternative exemption in cases of hardship or widows with dependent children. 1923, No. 21, a. 50

61. (1) For the purposes of this section " unimproved land " means land on which there are not, on the thirty-first day of March immediately preceding the year of assessment, improvements of a value equal to one pound an acre or equal to one third of the unimproved value, whichever is the less, and which in the opinion of the Commissioner it is reasonable should have been improved to that extent.

■ Land tax 011 unimproved land. ' 1923, No. 21, [ s. 51 I L

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(2) This section shall not apply with respect to land situated in a borough, but applies to all other unimproved land as hereinbefore defined. (3 This section shall apply separately to all lands of a taxpayer forming one continuous area or separated at their nearest points by a distance not exceeding three miles in a straight line. (4) Notwithstanding anything to the contrary in section fifty-nine hereof, no deductions by way of special exemption under that section shall be made in respect of any unimproved land to which this section applies and of which the taxpayer has been the owner for three years or upwards. (5) In respect of any unimproved land to which this section applies and of which the taxpayer has been the owner for three years or upwards the rate of land tax shall be fifty per cent more than the rate fixed by the annual taxing Act in respect of other lands.

62. (1) Any person owning any leasehold estate in land shall be deemed for the purposes of this Part of this Act (though not to the exclusion of the liability of any other person) to be the owner of the fee simple, and shall be assessed and liable for land tax accordingly. (2) In the case of the owner of a leasehold estate in land there shall be deducted from the amount of land tax so payable by him in respect of that land (so far as it exceeds the land tax, if any, that would be payable by him in respect of the value of his leasehold estate independently of this section) the amount of land tax (if any) payable in respect of that land by the owner of any freehold estate or of any precedent leasehold estate in the land or any part thereof. (3) The provisions of this section shall not apply to leasehold estates in any land of the Crown, or in any Maori land, or in any land vested in fee simple in any person who in respect thereof is wholly exempted from land tax.

Assessment of lessees for land tax. 1936, No. 34, s. 3

] ] Liability of life tenant. 1923, No. 21,. s. 53 1 ( i 1

63. The owner of any life estate or of any other freehold estate less than the fee simple shall be deemed for the purposes of this Part of this Act to be the owner of the fee simple to the exclusion of any person entitled in reversion or remainder, and shall be assessed and liable for land tax accordingly.

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64. (1) Whenever two or more persons (hereinafter called joint owners) own land jointly or in common, whether as partners or otherwise, they shall be assessed and liable for land tax in accordance with the provisions of this section. (2) The joint owners shall be jointly assessed and liable in respect of the land so owned by them jointly or in common (hereinafter called the joint estate) as if it was owned by a single person, without regard to their respective interests in the same, and without taking into account any land owned by any one of them in severalty, or jointly or in common with any other person. (3) One special exemption only shall be allowed to such owners in respect of all land so owned by them jointly or in common.

Joint owners to be assessed jointly. 1923, No. 21, s. 54

65. (1) In addition to the assessment under the last preceding section, each joint owner shall be assessed and liable in respect of his individual interest in the joint estate, together with any other land owned by him in severalty, and with his individual interests in any other land. (2) In the case of each joint owner there shall be deducted from the tax so payable by him under the provisions of this section (so far as such tax exceeds the land tax that would be payable by him if he owned no interest in any joint estate) his share of the tax so payable in respect of the joint estate. (3) The share of a joint owner in the tax so payable in respect of the joint estate shall bear the same proportion to the amount of that tax as his interest in the joint estate bears to the whole value of that estate.

Joint owners to be severally assessed also. 1923, No. 21, s. 54

66. (1) No joint owner assessed under the two last preceding sections shall be entitled to a greater special exemption in the aggregate than the special exemption to which he would be entitled if he were assessed only under section sixty-five hereof, and in any such case the Commissioner shall, if and so far as necessary, reduce the exemptions otherwise allowable under either of the two last preceding sections. (2) For the purposes of this section, but not otherwise, any special exemption allowed in respect of a joint assessment shall be apportioned between the owners in proportion to the interest of each of them in the land in respect of which the exemption is so allowed.

Limitation of special exemptions in cases of joint ownership. 1923, No. 21, s. 56

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67. (1) For the purposes of this Part of this Act all land owned by a company shall be deemed (though not to the exclusion of the liability of the company or of any other persons) to be owned in common by the shareholders of that company in the proportions which their interests in the paid up capital of the company bear to the total paid up capital; and the said shareholders shall be individually assessed and liable for land tax accordingly in manner provided by section sixty-five hereof, and shall be entitled to the same deduction as is therein provided; and all references in that section to a joint assessment shall be read as references to the assessment of the company. (2) The term " shareholder " shall for the purposes of this and the next succeeding section include all persons on whose behalf a share in the company is held by a trustee or by any other person. (3) No shareholder shall be liable to land tax under this section if his assessable interest, calculated in accordance with this section, in the lands (other than business premises as hereinafter defined) owned by the company is less than five hundred pounds. (4) " Business premises " means any piece of land included within the area of a building used for business purposes, together with such additional land as immediately adjoins that building and is used and occupied in connection therewith and does not exceed in extent the area of the building itself. When any area so adjoining a building and used and occupied in connection therewith exceeds the area of the building, the Commissioner shall from time to time determine, as he thinks fit, what part of that adjoining area, equal to the area of the building, shall be deemed to be business premises. (5) A building shall be deemed to be used for business purposes within the meaning of this section if it is exclusively or principally used, whether by the owner or by any occupier or occupiers, for the purposes of any business.

Liability of shareholders of company. 1923, No. 21, s. 56

Two or more companies with substantially the same shareholders. 1923, No. 21, s. 58 1924, No. 22, 5.3

68. (1) If two or more companies consist substantially of the same shareholders, those companies shall be deemed for the purposes of land tax to be a single company, and shall be jointly assessed and jointly and severally liable accordingly, with such right of contribution or indemnity between themselves as is just.

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(2) For the purposes of this section two companies shall be deemed to consist substantially of the same shareholders if not less than one half of the paid up capital of each of them is held by or on behalf of shareholders in the other or if not less than one half in nominal value of the allotted shares in each of them is held by or on behalf of shareholders in the other. Shares in one company held by or on behalf of another company shall for this purpose be deemed to be held by the shareholders in the last mentioned company.

69. (1) When two or more persons own land in severalty but occupy it jointly, whether as partners or on joint account or otherwise, the same land tax shall be payable by them and by each of them as if they owned the whole of the said land jointly, in the proportions which the unimproved values of the lands so severally owned bear to one another, and for the purposes of this Part of this Act they shall be deemed to be joint owners of those lands accordingly. (2) Without limiting in any way the meaning of the term " joint occupation," two or more persons shall be deemed to occupy lands jointly within the meaning of this section if those lands are occupied, worked, or managed by any one or more of those persons on behalf of all of them or on a joint account, or if those lands are occupied, worked, or managed by any other person as trustee for or otherwise on behalf of all of those persons.

Liability of joint occupiers. 1923, No. 21, s. 59

70. Where an agreement has been made for the sale of land, whether before or after the coming into operation of this Act, the buyer shall be deemed to be the owner of the land for the purposes of this Part of this Act (though not to the exclusion of the liability of any other person) so soon as he has obtained possession of the land so purchased, although the agreement has not yet been completed by conveyance.

Liability of buyer in possession. 1923, No. 21, s. 60

71. (1) When any agreement has been made for the sale of land, whether before or after the coming into operation of this Act, and whether the same has been completed by conveyance or not, the seller shall be deemed to remain the owner of the land for the purposes of this Part of this Act (though not to the exclusion of the liability of any other person) until possession of the land has been delivered to the purchaser and at least fifteen per cent of the purchase money has been paid:

Seller to remain liable until possession delivered. 1923, No. 21, s. 61

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Provided that in any case in which possession has been so delivered, but less than fifteen per cent of the purchase money has been paid, it shall be lawful for the Commissioner to exempt the seller from the provisions of this section if the Commissioner is satisfied that the agreement for sale has been made in good faith and not for the purpose of evading the payment of land tax, and that the agreement is still in force. In any such case the decision of the Commissioner shall be final and conclusive. (2) In estimating the amount of purchase money which has been so paid all money owing by the purchaser to the seller and secured by any mortgage or other charge on the land, and all money lent to the purchaser by the seller, and all money owing by the purchaser to any other person and directly or indirectly guaranteed by the seller, shall be deemed to be unpaid purchase money. (3) When by virtue of this and the last preceding section the buyer and seller of land are both liable for land tax in respect thereof, there shall be deducted from the tax so payable by the seller in respect of the land the amount of the tax payable in respect thereof by the buyer. (4) Nothing in this section applies to any agreement of sale made, whether before or after the coming into operation of this Act, by a seller who at the date of that agreement was not the owner of land the unimproved value of which, including the unimproved value of the land so sold by him, was more than forty thousand pounds.

72. No conveyance, transfer, declaration of trust, x settlement, or other disposition of land (whether made a before or after the coming into operation of this Act) shall be effective so as to exempt the person making the same, so long as he remains or is in possession or in receipt of the rents or profits of any such land (whether on his own account or on acount of any other person), from any land tax which would have become payable in respect of that land had no such conveyance, transfer, declaration of trust, settlement, or disposition taken place; and for the purposes of this Part of this Act the person so making the same shall, while he remains or is so in possession of the land or in receipt of the rents or profits thereof, be deemed (though not to the exclusion of the liability of any other person) the owner of the land.

No disposition of land to exempt from tas hile possession retained. 1923, No. 21, s. 62

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73. Subject to the other provisions of this Part of this Act, the owner of any equitable estate in land shall be assessed and liable in respect of land tax as if the estate so owned by him were legal, but there shall be deducted from the tax so payable by him in respect of that estate the amount of any land tax paid in respect thereof by the legal owner of the land.

Liability of equitable owners. 1923, No. 21, s. 63

74. (1) Any person owning land as a trustee shall be assessed and liable in respect of land tax as if he were beneficially entitled to the land, save that when he is the owner of different lands in severalty in trust for different beneficial owners who are not, by reason of joint occupation or otherwise, liable to be jointly assessed for land tax in respect of the same, the tax so payable by him shall be separately assessed in respect of each of those lands; and save also that when a trustee is also the beneficial owner of other land he shall be separately assessed in respect of that land and of the land of which he is a trustee, unless, by reason of joint occupancy or for any other reason, he is liable to be jointly assessed independently of this section. (2) Notwithstanding anything in this section, a trustee may be assessed for land tax in respect of the interest of any beneficiary in the land owned by the trustee at the rate at which the beneficiary himself is liable to be assessed when, by reason of the ownership of other land, or his absence from New Zealand, or for any other reason, the beneficiary is liable to be assessed at a higher rate than that at which the trustee would be assessed independently of this section. (3) For the purpose of any special exemption to be allowed either to the trustee or to the beneficial owner the land shall be deemed to be owned by the beneficial owner, and the exemption shall be allowed or apportioned by the Commissioner accordingly in such manner as he deems just and reasonable. (4) When land is held by His Majesty in trust the beneficiaries under that trust shall make returns and be assessable and liable for land tax as if their interests were legal.

Liability of trustees. 1923, No. 21 ; s. 64

3 Liability of r mortgagees in 5 possession. 1 1923, No. 23, 1 s. 65 e

75. A mortgagee in possession of land shall be deemed for the purposes of this Part of this Act, so long as snch possession continues (though not to the exclusion of the liability of any other person), to be the beneficial owner of the estate or interest which is subject to the

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mortgage, and shall be liable for land tax accordingly; but there shall be deducted from the tax so payable by him the amount of land tax (if any) paid in respect of that estate or interest by the mortgagor: Provided that in each of the five years of assessment immediately following the year in which the mortgagee entered into possession the Commissioner shall, if satisfied that the mortgagee is in possession solely for the purpose of furthering the realization of his security, assess him separately in respect of the estate or interest of which he is deemed to be the beneficial owner as aforesaid.

Assessment upon disposal before payment date. 1925, No. 12, s. 3

76. (1) Where the owner of any land as at noon on the thirty-first day of March preceding any year of assessment disposes or intends to dispose of the same before the due date of the payment of land tax in respect thereof, the Commissioner may, if he thinks fit, either before or after the passing of the annual taxing Act or the due date for the payment of land tax, require the original owner to make a return under section seven of the principal Act of all land whereof he is assessable for land tax for that year of assessment, and may assess him for land tax either in respect of all such land or, as he thinks fit, in respect of so much thereof as has been or is to be disposed of as aforesaid. (2) Any person so assessed shall have the same right of objection as if he had been assessed in the ordinary course. (3) Tax so assessed shall be payable on demand, which may be made in and by the notice of assessment or at any later date, and the tax shall be recoverable in the same manner as land tax assessed in the ordinary course. (4) If any assessment of land tax made pursuant to this section is made before the passing of the annual taxing Act by which the rate of land tax is fixed, the tax shall be assessed at the rate fixed by the annual taxing Act last passed before the date of the assessment. (5) No assessment made under this section shall in any manner preclude a subsequent assessment of the same person in the ordinary course, but in such case the tax paid under the earlier assessment shall be credited in the subsequent assessment.

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(6) On application in writing made by or on behalf of any person who would be liable for the payment of any land tax assessed under this section in the event of default in the payment of such tax being made by the person primarily liable therefor, the Commissioner may give to such first mentioned person notice of the amount for which he would be so liable if default were made as aforesaid.

77. Whenever double taxation is imposed by this Part of this Act on the same estate or interest in land by reason of that estate or interest being owned or deemed to be owned by more than one person, and no provision is made in this Part of this Act for such a deduction as will prevent such double taxation, the Commissioner may make such deduction or other adjustment as he deems just and necessary for the avoidance of such double taxation.

Adjustment in cases of double taxation. 1923, No. 21, s. 66

78. (1) Every taxpayer who on the thirty-first day of March in the year preceding the year of assessment is an absentee within the meaning of this section shall be assessed and liable for land tax to an amount greater by fifty per cent than the amount for which he would have been assessed independently of this section, including in such last mentioned amount his share of any land tax for which he is assessable jointly with any other taxpayer, whether an absentee or not, and the annual taxing Act shall be read and construed accordingly. (2) Every person shall be deemed to be an absentee for the purposes of this section unless he has been personally present in New Zealand for at least one half of the period of four years immediately preceding the year of assessment: Provided that no person who has acquired all his land in New Zealand within the said period of four years shall be deemed to be an absentee if he has been personally present in New Zealand for at least one half of the period which has elapsed between the time when he first acquired any of that land and the commencement of the year of assessment: Provided further that no person who is absent from New Zealand in the service in any capacity of the Government of New Zealand, nor the wife of any such person if she is absent from New Zealand with him, shall by reason of such absence be deemed to be an absentee within the meaning of this section.

Increase of land tax of absentee taxpayers. 1923, No. 21, B. 67 1926, No. 24, s. 3

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(3) This section shall not apply to companies, but shall apply to shareholders in companies, in accordance with the provisions of section sixty-seven hereof. (4) Where any shareholder in a company is assessable as an absentee for land tax in respect of the land of the company, the company shall be deemed for the purposes of this Part of this Act to be the agent of the shareholder, and shall be liable to pay on his behalf the land tax payable by him so far as it relates to the land of the company, and all the provisions of this Act as to agents shall apply accordingly: Provided that no tax shall be so recovered from the company unless a written demand therefor has been made upon the company by the Commissioner within one year from the due date of the tax, and while the taxpayer continues to remain a shareholder of the company. (5) No trustee assessed as such shall be deemed to be an absentee.

79. (1) For the purposes of land tax every person who is the owner of land at noon on the thirty-first day of March in any year may be deemed (though not to the exclusion of any other person) to continue to be the owner of that land at noon on the thirty-first day of March in the next succeeding year, unless written notice is given by him or on his behalf to the Commissioner, in accordance with this section, of the fact that he has ceased to be the owner of that land, and of the name of his successor in title. (2) Such notice shall be given to the Commissioner before the former owner has been assessed for land tax, in pursuance of this section, for the year following that in which he ceased to be the owner of the land. (3) The fact that the former owner has not made a return of the land as still owned by him, or that his successor in title has made a return of that land, shall not in itself be deemed a sufficient notice for the purposes of this section. (4) Where no such notice has been given in accordance with this section the Commissioner may assess either the former owner or his successor in title, or both of them; but the tax shall be recoverable from one of them only.

Notice to Commissioner of change of ownership of land. 2923, No. 21, s. 68

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(5) Any tax so paid by the former owner shall be deemed to be paid on behalf of his successor in title, so far as it does not exceed the tax for which the successor in title might himself have been assessed in respect of that land, and may to that extent be recovered by the former owner from his successor in title accordingly. (6) A former owner shall not be assessable under this section for any year except the year of assessment immediately subsequent to the year in which he ceased to be the owner of the land.

80. (1) Land shall be exempt from land tax in the following cases, and to the following extent: — {a) Land owned by or in trust for a local or public authority other than the Public Trustee or the State Fire Insurance General Manager: (b) Land owned by or in trust for a university, college, high school, secondary school, or other public educational institution in New Zealand not carried on for private pecuniary profit: (c) Land owned by or in trust for a separate institution under the Hospitals Act, 1926: (d) Land owned by or in trust for a friendly society, a registered building society, or a savings bank established under the Trustee Savings Banks Act, 1948: (e) Land owned by or in trust for a society incorporated under the Agricultural and Pastoral Societies Act, 1908, and used by that society as a showground or place of meeting: (/) Land owned by or in trust for any company and used by that company as the permanent way of a public railway or tramway, or for yards and buildings used for the purposes of the traffic on that railway or tramway or for the purpose of providing access to any such railway, tramway, yards, or buildings as aforesaid: (g) Land owned by or in trust for a society incorporated under the Libraries and Mechanics' Institutes Act, 1908, and used by that society as a site for the purposes of the society:

Exemption of certain classes of land. 1923, No. 21, s. 69 1926, No. 18 1929, No. 12, b.8(1) 1931, No. 71 1936, No. 34, s. 4 1944, No. 28, s. 4 (2) 1947, No. 59, Pt.l 1948, No. 62, 5.3(1)

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(h) Land owned by or in trust for any society or trustees and used by such society or trustees (otherwise than for private pecuniary profit) as the site of a public library, public museum, public cemetery or burial ground, public recreation ground, or public garden, domain, or reserve: (i) Land owned by or in trust for any society or institution established exclusively for charitable purposes, and not carried on for private pecuniary profit, if the land is used as a site for the purposes of that society or institution: Provided that if any such site exceeds fifteen acres in extent this exemption shall be limited to fifteen acres thereof to be selected by the Commissioner: (j) Maori customary land within the meaning of the Maori Land Act, 1931: (k) Crown land or other land administered by a Land Board and held as a small grazing run or for pastoral purposes, and any other land reserved, set apart, or granted by the Crown as endowments and occupied for pastoral purposes: (1) Land owned by trustees on account of a superannuation fund. (2) The benefit of the exemptions provided by this section shall in each case be limited to the owner specified in this section, and shall not extend to any other person who is the owner of any estate or interest in the land (whether as purchaser, lessee, or otherwise howsoever), nor shall it extend to land held by an owner specified in this section in trust for an owner not so specified.

Reduction of tax in respeet of land held by religious society. 1923, No. 21, s. 70 1936, No. 34, s. 5 (1) 1944, No. 28, 5.4(2)

81. (1) Notwithstanding anything in the foregoing provisions of this Part of this Act, land tax shall be chargeable in respect of the class of land mentioned in subsection two hereof, in so far as such land is not exempt from land tax by virtue of the last preceding section, at one fourth the rate that would be chargeable in respect thereof if this section had not been passed

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or at the rate of one halfpenny in the pound of the unimproved value on which land tax is payable, whichever is the greater. (2) This section relates to land owned by or in trust for any religious society, if such land or the rents or profits thereof are used exclusively for charitable purposes and if the principal purpose for which that society is established is the teaching, maintenance, or advancement of religion.

82. (1) No Maori shall be chargeable with land tax in respect of his interest in Maori land unless the land is, as to his interest therein, in the occupation or possession of any person other than the Maori owner or a trustee for him. (2) A Maori shall be chargeable with land tax in respect of his interest in Maori land at one half of the rate applicable to European land if such Maori land is, as to his interest therein, in the occupation or possession of any person other than the Maori owner or a trustee for him: Provided that no Maori shall, for any year of assessment, be chargeable with an amount of land tax in respect of his interest in Maori land in excess of one tenth of the total revenue derived or derivable from that land in respect of the year ending on the thirty-first day of March preceding the year of assessment. (3) A European shall be chargeable with land tax in respect of any interest owned by him in Maori land in the same manner and to the same extent as if it was not Maori land, save that the owner of a leasehold estate in Maori land shall not be deemed by virtue of this Part of this Act to be the owner of the fee simple thereof. (4) If any Maori land is held by a trustee (not being a Maori) in trust for the Maori owner, the tax shall be payable on behalf of the Maori owner by the trustee. In all other cases the tax shall be payable on behalf of the Maori owner by any owner of a leasehold estate or interest in the land. (5) This section shall apply to the trustee of a Maori in the manner in which it applies to that Maori himself.

Liability of Maori for Maori land. 1923, No. 21, s. 71 1926, No. 24, s. 4 1947, No. 59, Pt.l

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PART VI Income Tax 83. " Absentee " means, in this Part of this Act, a person whose home has not been in New Zealand during any part of the income year: Provided that a taxpayer shall not be deemed to be an absentee within the meaning of this Part of this Act if the Commissioner is satisfied that the absence of the taxpayer from New Zealand during the income year has been for the sake of his or her health, or of the health of the husband or wife, as the case may be, or of any child of the taxpayer: Provided further that no person who is absent from New Zealand in the service in any capacity of the Government of New Zealand, nor the wife of any such person if she is absent from New Zealand with him, shall by reason of such absence be deemed to be an absentee within the meaning of this Part of this Act.

Meaning of " absentee 1923, No. 21, s. 74 (2) 1926, No. 24, s. 3 1939, No. 34, s. 7

84. (1) Subject to the provisions of this Act, there shall be levied and paid for the use of His Majesty, in and for the year commencing on the first day of April in each year, a tax herein referred to as income tax. (2) Subject to the provisions of this Act, such tax shall be payable by every person on all income derived by him during the year preceding the year in and for which the tax is payable. (3) The year in which income is so derived is in this Act referred to as " the income year," and the year in and for which income tax is payable is in this Act referred to as " the year of assessment ".

Income tax imposed. 1923, No. 21, s. 72

85. (1) Income tax shall be assessed and levied on the taxable income of every taxpayer at snch rate or rates as may be fixed from time to time by Acts to be passed for that purpose. (2) The Act by which the rate of income tax is so fixed for any year is in this Act referred to as " the annual taxing Act

Bates to be fixed by annual taxing Act. 1923, No. 21, s. 73 (1), (2) 3950, No. 22, s. 4

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86. (1) Where in any income year any taxpayer has derived assessable income and has also derived any non-assessable income from a source referred to in the next succeeding subsection, then, notwithstanding anything to the contrary in this Act or in the annual taxing Act, the rate of income tax payable on his taxable income shall be computed as if the non-assessable income derived by him as aforesaid were assessable income. (2) The non-assessable income referred to in the last preceding subsection includes the following:— (a) Income derived from securities issued by the Government of New Zealand subject to the condition that the income derived therefrom shall be exempt from income tax: (b) Income derived from debentures issued by companies on terms providing for the payment of income tax by such companies, as provided by section two hundred and fortyfour hereof, and income derived from debentures to which section one hundred and forty-seven hereof applies: (c) Dividends or other profits derived from shares or other rights of membership in companies: (d) Income that is exempted from income tax under section one hundred and fifty-eight hereof.

When nonassessable income to be taken into account. 1931, No. 20, s. 6 1936, No. 34, ss. 6 (3), 11 1939, No. 34, s. 18

87. (1) Notwithstanding anything in section seventythree hereof in the assessment for income tax for any year of every taxpayer who (not being an absentee) has attained the age of sixty-five years before the commencement of the year of assessment, there shall be allowed from the tax payable a special rebate of the sum of fifteen pounds: Provided that where the tax payable by the taxpayer before allowing that rebate is less than fifteen pounds there shall be allowed a special rebate of the amount of the tax: Provided also that where the taxpayer is a married man upon whom an aggregate assessment is made under section one hundred and four hereof there shall be allowed in the aggregate assessment a special rebate equal to the sum of the special rebates which would be allowable to him and his wife under this section if separate assessments were made under the said section.

Special rebate to persons of sixty-five years. 1950, No. 87, s. 4

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(2) The rebate to which any taxpayer is entitled under this section shall be in addition to any rebate to which he may be entitled under any annual taxing Act. Special Exemptions 88. From the yearly assessable income of every person, other than a company or a public authority or an unincorporated body, there shall, for the purpose of assessing income tax on that income, be deducted by way of special exemption the sum of two hundred pounds.

Special exemption of £2OO. 1923, No. 21, s. 74 (1) 1936, No. 34, s. 6 1939, No. 3, s. 13 1939, No. 34, s. 7

Special exemption for married man. 1932-33, No. 40, s. 4 1936, No. 34, s. 12 (1) 1939, No. 34, s. 8 1945, No. 37, s. 4

89. (1) Every taxpayer (other than an absentee) who at any time during the income year is a married man shall, subject to the provisions of this section, be entitled in respect of his wife to a deduction by way of special exemption from his assessable income of one hundred pounds diminished at the rate of two pounds for every complete pound of the excess of the income derived by his wife during the income year over fifty pounds: Provided that in no case shall the special exemption allowable under this section in respect of any year result in a reduction of tax exceeding twenty-six pounds. (2) No exemption shall be allowed under this section in respect of a wife whose income in her own right derived from all sources in the income year amounted to or exceeded one hundred pounds, or who in fact has not during the income year been supported by her husband. (3) For the purposes of this section the amount of any benefit payable to or in respect of a wife under the Social Security Act, 1938, shall be deemed not to be income derived by her.

Special exemption for married woman supporting husband. 1933, No. 34, s. 2 1936, No. 34, s. 12 (2) 1939, No. 34, s. 8 1945, No. 37, s. 4

90. (1) Every taxpayer (other than an absentee) who at any time during the income year is a married woman shall, subject to the provisions of this section, be entitled in respect of her husband to a deduction by way of special exemption from her assessable income of one hundred pounds diminished at the rate of two pounds for every complete pound of the excess of the income derived by her husband during the income year over fifty pounds:

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Provided that in no case shall the special exemption allowable under this section in respect of any year result in a reduction of tax exceeding twenty-six pounds. (2) No exemption shall be allowed under this section in respect of a husband whose income in his own right derived from all sources in the income year amounted to or exceeded one hundred pounds or who in fact has not during the income year been supported by his wife. (3) For the purposes of this section the amount of any benefit payable to or in respect of a husband under the Social Security Act, 1938, shall be deemed not to be income derived by him.

1938, No. 7

Special exemption for widowed or divorced taxpayer employing housekeeper. 1933, No. 43, s. 3 1936, No. 34, s. 13 1939, No. 34, s. 9 1945, No. 37, ss. 5, 6 (2) 1948, No. 78, s. 13 (1)

91. (1) For the purposes of this section the term " housekeeper " means a woman who is employed, either in the home or elsewhere, to have the care and control of any child or children in respect of whom a family benefit is payable under the Social Security Act, 1938, or who at any time during the income year was or were under the age of eighteen years or of any child who at any time during the income year was suffering from any permanent mental or physical infirmity and was thereby permanently incapacitated from earning his or her own living. (2) Every taxpayer, being a widow or a widower or a divorced person (other than an absentee), shall, subject to the provisions of this section, be entitled in respect of a housekeeper, as hereinbefore defined, to a deduction by way of special exemption from his or her assessable income of one hundred pounds: Provided that in no case shall the special exemption allowed under this section in respect of any year exceed the aggregate amount paid by the taxpayer during that year by way of salary or wages to a housekeeper or housekeepers or result in a reduction of tax exceeding twenty-six pounds. (3) Where a housekeeper as hereinbefore defined is employed by the taxpayer during part only of the income year, the exemption to which the taxpayer would otherwise be entitled under this section shall be reduced by one twelfth for every month or part of a month during which a housekeeper was not so employed.

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92. A taxpayer whose marriage is terminated during any income year, whether by death or otherwise, shall not be entitled in respect of that income year to a special exemption in respect of a housekeeper under the last preceding section if the taxpayer is entitled in respect of that year to a special exemption under section eighty-nine or section ninety hereof, as the case may be, or to a special exemption allowed instead thereof under section one hundred and four hereof.

Exemption in respect of housekeeper when marriage of taxpayer terminated during income year. 1939, No. 34, s. 8

Special exemptions for support of dependent relatives. 1939, No. 34 s. 11 1945, No. 37, ss. 6, 7 1946, No. 38, s. 2 1950, No. 87, s. Q

93. (1) Every person, other than an absentee, shall be entitled to a deduction by way of special exemption from his assessable income of the amount (not exceeding in the aggregate fifty pounds in respect of any one relative) contributed by him during the income year towards the support of any relative. (2) No special exemption shall be allowed under this section in respect of any relative of the taxpayer to whom or on whose behalf any monetary benefit other than a family benefit was payable out of the Social Security Fund during the whole or any part of the income year. (3)' For the purposes of this section the term " relative " means a person proved to the satisfaction of the Commissioner to be a relation of the taxpayer by blood, marriage, or adoption (not being the wife or husband of the taxpayer); and includes a former wife of the taxpayer: Provided that—(a) Where the wife of the taxpayer is not living with him she shall be deemed to be a relative of the taxpayer for the purposes of this section: (b) A special exemption under this section in respect of the wife of the taxpayer shall be allowable only where the amount thereof exceeds the amount of the special exemption to which the taxpayer is entitled in respect of his wife under section eighty-nine hereof, and shall be allowable in substitution for the last mentioned exemption: (c)i For the purposes of this section the wife of a taxpayer shall be deemed to be living with him unless the Commissioner is satisfied that she is in fact separated and living separate and apart from him, whether pursuant to a decree, order, or judgment of any Court, or

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pursuant to an agreement for separation, or by reason of the desertion of one of the parties by the other of them, or otherwise. (4) Where claims are made under this section by two or more taxpayers for deductions by way of special exemption exceeding fifty pounds in the aggregate in respect of contributions towards the support of the same person the Commissioner shall not allow a greater exemption in the aggregate than fifty pounds, to be apportioned among the several taxpayers in such manner as the Commissioner thinks fit. _ (5) No special exemption shall be allowed under this section in respect of any relative if the Commissioner is satisfied that the relative has sufficient income or capital for his own support and that the contributions towards his support were not necessary. (6) In no case shall the special exemption or proportion thereof allowable under this section to any taxpayer in respect of any one relative in respect of any income year result in a reduction of tax exceeding twenty-six pounds.

94. (1) Every person, other than an absentee, who has effected an insurance on his own life for his own benefit or for the benefit of his wife or children shall be entitled to a deduction by way of special exemption from his assessable income of the amount of premiums paid in the income year in respect of that insurance. (2) Every person, other than an absentee, who is a contributor to the National Provident Fund, or to any superannuation fund, or to the insurance fund of a friendly society, shall be entitled to a deduction by way of special exemption from his assessable income of the amount of his contributions during the income year. (3) The deductions by way of special exemption provided for in this section shall not in any case exceed in the aggregate the sum of one hundred and fifty pounds or fifteen per cent of the assessable income of the taxpayer, whichever amount is the less. (4) Notwithstanding anything to the contrary in subsection one of this section, a special exemption shall not be allowed under that subsection in respect of the premiums paid on any pure endowment policy, as hereinafter defined, effected after the twenty-second day of December, nineteen hundred and thirty-three (being the date of passing of the Land and Income Tax Amendment Act, 1933).

Special exemption in respect of life insurance premiums and superannuation and insurance fund contributions. 1923, No. 21, s. 77 1933, No. 43, s. 5 1939, No. 34, s. 12

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(5) For the purposes of the last preceding subsection a pure endowment policy means a policy of life insurance which does not provide for the payment of a specified capital sum on the death of the assured. 95. The amount paid by any person as stamp duty in any year pursuant to section eight of the National Expenditure Adjustment Act, 1932, in respect of interest included in his assessable income shall be deductible by way of special exemption under this Act from the assessable income of such person for that year.

Special' exemption in respect of certain stamp duty. 1932, No. 8, s. 46 (8) 1941, No. 18, 8.3(9)

96. The amount paid by any person as interest tax in any year pursuant to the Finance Act, 1932-33, in respect of interest included in his assessable income shall be deductible by way of special exemption under this Act from the assessable income of such person for that year.

Special exemption in respect of interest tax. 1932-33, No. 42, s. 10 1941, No. 18, s. 3 (9)

General Exemptions 97. (i) The following incomes shall be exempt from taxation: — (a) The salary and emoluments of the GovernorGeneral in respect of his office: (b) The income, other than income received in trust, of a local authority, or of any public authority other than the Public Trustee and the State Hydro-electric Department (in respect of the Electric Supply Account), the Marketing Department, and the Mines Department (in respect of the State Coal Mines Account): (c) Income derived from sinking funds in respect of the public debt or of the debt of any local authority: (d) The income of a building society under the Building Societies Act, 1908: (e) The income of a separate institution under the Hospitals Act, 1926: (/) The income of any co-operative company incorporated in New Zealand, to the extent hereinafter provided, namely:— (i) In the case of any such company having for its object or one of its objects the manufacture of cheese, casein, dried milk, or butter, from milk or cream supplied to the

Incomes wholly exempt from taxation. 1923, No. 21, S: 78 1926, No. 18, s. 12 (4) 1930, No. 8, s. 5 1932-33, No. 40, s. 6 1933, No. 43, s. 4 1935, No. 32, 8.6(1) 1939, No. 3, p. 14 1940, No. 3, ss. 4 (1), 5 1943, No. 9, s. 8 1943, No. 20, s. 4 1943, No. 22 1944, No. 28, s. 4 1945, No. 36, s. 3 1945, No. 37, s. 8 1947, No. 57 1948, No. 54, s. 2 1948, No. 58, s. 2 1948, No. 78, s. 9 1950, No. 87, s. 5

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company by its shareholders in so far only as its income is derived from the treatment, manufacture, and sale of products of milk, and if and so far only as the rules of the company provide that its income shall be distributed solely amongst the suppliers of milk in proportion to the quantity of milk or butterfat supplied by them: (ii) In the case of any such company having for its object or one of its objects the sale of milk supplied to the company by its shareholders if and so far only as the rules of the company provide that its income shall be distributed solely amongst the suppliers of milk in proportion to the quantity of milk supplied by them: (iii) In the case of any such company having for its object or one of its objects the treatment for human consumption of pigs supplied to the company by its shareholders and the marketing of the produce, if and so far only as the rules of the company provide that its income shall be distributed solely amongst the suppliers of pigs in proportion to the value or weight of the pigs supplied by them: (g) Income derived by any person from any pension under the War Pensions Act, 1943, or from any other pension granted in Great Britain or within the British dominions in respect of any war, or from any pension granted under section forty-seven of the Superannuation Act, 1947: (h) Income derived by any person from any pension granted in respect of his service in the South African War: (i) Dividends and other profits derived from shares or other rights of membership in companies, other than companies which are exempt from income tax: (j) Income derived by a woman in the form of payments in the nature of alimony or maintenance made to her by her husband or former husband out of moneys belonging to him:

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{Jc) Income derived by a person who is not (within the meaning of this Part of this Act) resident in New Zealand, from stock or debentures which have been issued by the Government of New Zealand, or by any local or public authority, or by the Public Trustee acting as the agent of a land settlement association under the Land Settlement Finance Act, 1909, and the interest on which is payable out of New Zealand: (I) Income derived by the trustees of a superannuation fund: (m) The income of a friendly society, except so far as derived from business carried on beyond the circle of its membership: (n) Income (not being income of the kind referred to in paragraph (o) hereof) derived by trustees in trust for charitable purposes, or derived by any society or institution established exclusively for such purposes and not carried on for private pecuniary profit: (o) Income derived directly or indirectly from any business carried on by or on behalf of or for the benefit of trustees in trust for charitable purposes within New Zealand, or derived directly or indirectly from any business carried on by or on behalf of or for the benefit of any society or institution established exclusively for such purposes and not carried on for private pecuniary profit: Provided that if the aforesaid purposes are not limited to New Zealand the Commissioner may apportion the income in such manner as he deems just and reasonable between such purposes within New Zealand and the like purposes out of New Zealand, and may allow to the trustees, society, or institution a partial exemption accordingly: {p) Income derived by any society or association, whether incorporated or not, which is, in the opinion of the Commissioner, established substantially or primarily for the purpose of promoting any amateur game or sport (other than horse racing or trotting) if that game or

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sport is conducted for the recreation or entertainment of the general public, and if no part of the income or other funds of the society or association is used or available to be used for the private pecuniary profit of any proprietor, member, or shareholder thereof: (q) Income derived by any society or association, whether incorporated or not, which is, in the opinion of the Commissioner, established substantially or primarily for the purpose of advertising, beautifying, or developing any city, borough, or other district so as to attract trade, tourists, visitors, or population, or to create, increase, expand, or develop amenities for the general public, if no part of the income or other funds of the society or association is used or is or may become available to be used for any other purpose, not being a charitable purpose: (r) Income derived by any person from any monetary benefit granted to him from the Social Security Fund: (s) Income derived by any person from any maintenance or allowance provided for or paid to him in respect of his attendance at an educational institution in terms of a scholarship or bursary: (£) Income derived by any person, in repect of any period of incapacity for work, from any sick pay or other allowances paid to him under section twenty-five of the National Provident Fund Act, 1950, or paid to him by a friendly society registered under the Friendly Societies Act, 1909, or paid to him from any sick, accident, or death benefit fund to which he was a contributor at the date of the commencement of that period of incapacity: (ut) Income derived by any trustee in trust for any sick, accident, or death benefit fund, not being income derived directly or indirectly from any business carried on by or on behalf of or for the benefit of that trustee: (v) Income derived by any person from any compensation received by him under the Workers' Compensation Act, 1922, whether as a lump sum or by weekly payments:

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(w) Income expressly exempted from income tax by any other Act to the extent of the exemption so provided. (2) For the purposes of this section the expression " sick, accident, or death benefit fund " means any fund established for the benefit of the employees of any employer or of the members of any incorporated society or for the benefit of the widows and dependants of any deceased employees of any employer, or of any deceased members of any incorporated society, and approved for the time being by the Commissioner. 98. Income derived (whether before or after the passing of this Act) from any business carried on within the Ross Dependency (as defined in His Majesty's Order in Council issued under the British Settlements Act, 1887, and published in the New Zealand Gazette of the sixteenth day of August, nineteen hundred and twentythree) by virtue of a licence heretofore issued by or on behalf of His Majesty's Imperial Government shall be exempt from income tax in New Zealand if the Commissioner of Taxes is satisfied that by the terms of such licence it is provided that no charge, royalty, tax, or duty (by whatever name called) other than the rent or royalty reserved by the licence shall be imposed on the licensee.

Exemption from income tax of profits derived within Boss Dependency. 1924, No. 64, s. 12

Assessable Income and Deductions 99. Without in any way limiting the meaning of the term, the assessable income of any person shall for the purposes of this Act be deemed to include, save so far as express provision is made in this Act to the contrary,— (a) All profits or gains derived from any business (including any increase in the value of stock in hand at the time of the transfer or sale of the business, or on the reconstruction of a company): (b) All salaries, wages, or allowances (whether in cash or otherwise), including all sums received or receivable by way of bonus, gratuity, extra salary, or emolument of any kind, in respect of or in relation to the employment or service of the taxpayer:

Items included in assessable income. 1923, No. 21, s. 79 1924, No. 22, ss. 7, 8 1935, No. 32, s. 8 1950, No. 22, s. 4

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Provided that where any bonus, gratuity, or retiring allowance (not being moneys paid to any director of a company pursuant to its articles of association) is paid in a lump sum in respect of the employment or service of the taxpayer on the occasion of his retirement from such employment or service only five per cent of that lump sum shall be deemed to be income: (c) All profits or gains derived from the sale or disposition of land or any interest therein, if the business of the taxpayer comprises dealing in such property, or if the property was acquired for the purpose of selling or otherwise disposing of it at a profit: (d) All rents, royalties, fines, premiums, or other revenues (including payments for or in respect of the goodwill of any business, or the benefit of any statutory licence or privilege) derived by the owner of land from any lease, licence, or easement affecting the land, or from the grant of any right of taking the profits thereof: (e) All interests, dividends, annuities, and pensions: Provided that where any securities have been acquired by purchase or otherwise during the income year and were not transferred before the twenty-sixth day of October, nineteen hundred and thirty-five (being the date of passing of the Land and Income Tax Amendment Act, 1935), the Commissioner may, where he considers it equitable so to do, apportion between the transferor and the transferee any interest due or accruing due at the date of the transfer and not then paid: (/) Income derived from any other source whatsoever.

100. Without limiting the. meaning of the term " allowances " as used in paragraph (b) of subsection one of the last preceding section, it is hereby declared that the said term shall hereafter be deemed to include (in the case of a taxpayer who in any income year has been provided in respect of any office or position held by him with board or lodging, or the use of a house or quarters, or has been paid an allowance in lieu of being

Value of board, lodging, and house allowances. 1932-33, No. 40, s. 3

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so provided with board or lodging or with the use of a house or quarters) the value of such benefits, such value to be determined in case of dispute by the Commissioner, subject to the taxpayer's right of objection to the Commissioner's assessment, in accordance with the provisions of Part 111 of this Act.

Power to exempt employees' allowances. 1947,. No. 45, s. 9

101. (1) The Commissioner may from time to time determine whether and to what extent any allowance in respect of or in relation to the employment or service of any person constitutes a reimbursement of expenditure exclusively incurred by him in the production of his assessable income, and the allowance shall to the extent so determined be exempt from income tax. (2) Every determination of the Commissioner under this section shall be final and conclusive.

Income derived from use or occupation of land. 1839, No. 34, s. 14

102. (1) The assessable income of any person shall, for the purposes of this Act, be deemed to include—(a) All profits or gains derived from the use or occupation of any land: {b) All profits or gains derived in any income year from the extraction, removal, or sale of any minerals, timber, or flax, whether by the owner of the land from which they are obtained or by any other person, reduced by an amount equal to the cost of those minerals or of that timber or flax: Provided that in any case where profits or gains from any minerals, timber, or flax are derived in two or more income years and an estimated proportion of the total cost thereof is claimed as a deduction in respect of each of those years, the total amount of those deductions in respect of all those years shall not exceed the total cost of the minerals, timber, or flax. (2) For the purposes of paragraph (b) of the last preceding subsection the term " timber " shall be deemed to include standing timber, and the term " sale " shall be deemed to include any disposition by way of a licence or. easement, or the grant of any right of taking any profits or produce from land.

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103. (1) Where any person transfers (otherwise than by will) the right to any income to any relative or to any related company for a period that is less than the prescribed period, without transferring the ownership of the property (if any) producing the income, that income shall be deemed to be the income derived by the transferor and by no other person as if the transfer had not been made. (2) Where by the terms of any settlement made by any person (in this section referred to as the settlor) the income of the settled property or of any property substituted therefor is payable to or to be applied or accumulated for the benefit of a relative of the settlor or any related company for a period that is less than the prescribed period and the settlor remains the beneficial owner of the corpus of that property or the settlement provides that that corpus shall revert to the settlor or to the wife or husband of the settlor or that the right to dispose of that corpus shall be reserved to the settlor or to the wife or husband of the settlor, the income from the settled property or from any property substituted therefor shall, so long as the income is derived by a beneficiary who is not entitled to the corpus, be deemed to be income derived by the settlor and by no other person as if the settlement had not been made. (3) Where any company transfers to any other person for a period that is less than the prescribed period the right to any income derived by the company, without transferring the ownership of the property (if any) producing the income, the income shall be deemed to be income derived by the company and by no other person as if the transfer had not been made. (4) Where by the terms of any settlement made by any company the income of the settled property or of any property substituted therefor is payable to or to be applied or accumulated for the benefit of any other person for a period that is less than the prescribed period and the company remains the beneficial owner of the corpus of that property or the settlement provides that that corpus shall revert to the company or to any shareholder in the company or to the wife or husband of any shareholder in the company or that the right to dispose of that corpus shall be reserved to the company or to any shareholder in the company or to the wife or

Assignments or settlements of income. 1950, No. 87, s. 13

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husband of any shareholder in the company, the income from the settled property or from any property substituted therefor shall, so long as the income is derived by a beneficiary who is not entitled to the corpus, be deemed to be income derived by the company and by no other person as if the settlement had not been made. (5) Where under any transfer or settlement income is payable to or to be applied or accumulated for the benefit of two or more persons in succession, the transfer or settlement shall be deemed for the purposes of this section to be a separate transfer or settlement in respect of each such person. (6) In this section — • " Income " includes any amount that would, if the right thereto had not been transferred or a settlement in respect thereof had not been made, have been treated as income of the person making the transfer or settlement, as the case may be: " The prescribed period " means — (a) In the case of a transfer to or a settlement in favour of a child of the transferor or settlor (whether or not it is also to or in favour of some other person), either a period which cannot be less than seven years calculated from the date from which the income is payable to or to be applied or accumulated for the benefit of the child under the transfer or settlement, or the period calculated from that date which must elapse before the child will attain the age of twenty-one years, whichever period is the longer: (b) In the case of a transfer to or a settlement in favour of a related company or a relative other than a child of the transferor or settlor (whether or not it is also to or in favour of some other person), a period which cannot be less than seven years from the date from which income is payable to or to be applied or accumulated for the benefit of the company or relative under the transfer or settlement:

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(c) In the case of a transfer or settlement by a company, a period which cannot be less than seven years from the date from which income is payable to or to be applied or accumulated for the benefit of the transferee or beneficiary, as the case may be, or, where the transferee or beneficiary is a person under the age of twenty-one years at the date of the transfer or settlement, either a period which cannot be less than seven years from the date from which income is payable to him or to be applied or accumulated for his benefit or the period calculated from the last mentioned date which must elapse before the transferee or beneficiary will attain the age of twenty-one years, whichever is the longer: " Related company " means a company which is under the control of the transferor or settlor or any relative or relatives of the transferor or settlor or any one or more of them: '' Relative '' means a husband or wife, or a relative by blood within the fourth degree of relationship (whether legitimate or illegitimate), or a relative by marriage or adoption: " Settlement " includes any disposition, trust, covenant, agreement, arrangement, or transfer of assets. (7) This section shall not apply with respect to any transfer or settlement made before the twenty-fourth day of November, nineteen hundred and fifty, nor to any marriage settlement, nor to any transfer or settlement made for fully adequate consideration in money or money's worth, nor to any transfer or settlement under which the income is payable to or to be applied for the benefit of any person during the whole of his life.

104. (1) In this section, — " Aggregable income " means the income, whether assessable or non-assessable, derived by a married woman while living with her husband: " Aggregable assessable income " means that portion of the aggregable income that consists of assessable income:

Aggregation of incomes of husband and wife. 1939, No. 34, s. 13 1945, No. 37, s. 10 (1) 1949, No. 29, s. 1

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" Aggregate assessment " means an assessment made under subsection four of this section: " Non-assessable income " means non-assessable income to which section eighty-six hereof applies: 4 4 Separate assessment " means an assessment made under subsection seven of this section. (2) For the purposes of this section a married woman shall be deemed to be living with her husband unless the Commissioner is satisfied that she is in fact separated and living separate and apart from him, whether pursuant to a decree, order, or judgment of any Court, or pursuant to an agreement for separation, or by reason of the desertion of one of the parties by the other of them, or otherwise. (3) This section applies with respect to the assessment of income tax—(a) Upon the assessable income derived by a married man during any income year in every case where the income (whether assessable or non-assessable) derived by him during that income year and the aggregable income derived by his wife during that year both exceed two hundred pounds; and (b) Upon the aggregable assessable income derived by a married woman during any income year in every case where the aggregable income derived during that year by her and the income (whether assessable or non-assessable) derived by her husband during that year both exceed two hundred pounds,— but does not apply in any other case. (4) Subject to the provisions of this section, the aggregable income derived by a married woman in any income year shall, for the purpose of assessing income tax thereon, be deemed to be income derived by her husband on his own behalf during that year, and the husband shall be assessable and liable for income tax accordingly. (5) In computing for the purposes of an assessment under the last preceding subsection (hereinafter referred to as an aggregate assessment) the taxable income of any taxpayer (being a married man), the Commissioner

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shall allow, instead of the special exemptions provided for by sections eighty-eight to ninety hereof, a .special iexemption of four hundred pounds, of which—(a) There shall be allowed against the assessable income an amount equal to the sum of the amounts that would have been allowable by way of special exemption under paragraph (a) of subsection seven of this section against the assessable income of the married man and against the assessable income of his wife if separate assessments had been made; and (b) The balance shall be allowed against the nonassessable income. (6) Subject to the last preceding subsection, the Commissioner, in computing the taxable income of any taxpayer for the purposes of an aggregate assessment, shall allow all other special exemptions and all deductions under section one hundred and fourteen hereof to which the taxpayer and his wife, or either of them, would have been entitled if they had been assessed for income tax otherwise than in accordance with this section. (7) Notwithstanding anything to the contrary in the foregoing provisions of this section, the Commissioner may make separate assessments of the assessable income derived by a married man during any income year and of the aggregable assessable income derived by his wife during that year, and shall make such separate assessments if required so to do by notice in writing signed by or on behalf of the married man or his wife and delivered to the Commissioner before the making of an aggregate assessment. In respect of such separate assessments the following provisions shall apply:— (a) Instead of the special exemption provided for in the case of a taxpayer (being a married man) by subsection five of this section, the married man and his wife shall each be entitled to a special exemption of two hundred pounds, which in each case shall be allowed against the assessable income so far as that income extends and as to the excess (if any) over the assessable income shall be allowed against the non-assessable income:

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(b) The other special exemptions and the deductions referred to in subsection six of this section shall be allowed partly to the married man and partly to Ms wife or wholly to the married man or wholly to his wife as the Commissioner in his discretion considers just and equitable: (c) The rate of tax payable in respect of the taxable income separately assessed to the married man and his wife shall be the rate that would have been applicable if the income had been assessed wholly to the married man by an aggregate assessment: (d) The married man shall be solely liable for the tax assessed to him, and his wife shall be solely liable for the tax assessed to her. (8) At any time before payment in full of the tax payable under any aggregate assessment the Commissioner may, if he thinks fit, cancel the assessment and make separate assessments in its place. (9) The tax payable by a married man in any year under an aggregate assessment, or by a married man and his wife under separate assessments, shall not in any case be less than the total income tax that would have been payable by the married man and his wife in that year if this section had not been passed: Provided that this subsection shall not apply in any case where, in making an aggregate assessment or separate assessments, the Commissioner has allowed a deduction under section one hundred and fourteen hereof in respect of a loss incurred by the married man or his wife. (10) Every married woman who derives aggregable income exceeding two hundred pounds in any income year during which her husband derives income (whether assessable or non-assessable) exceeding two hundred pounds shall in the next succeeding year furnish to the Commissioner (in addition to all other returns that she is required to make) a return of that aggregable income, in such form and at such time as the Commissioner may require. (11) Every married man who derives income (whether assessable or non-assessable) exceeding two hundred pounds in any income year during which his wife derives aggregable income exceeding two hundred

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pounds shall in the next succeeding year furnish to the Commissioner (in addition to all other returns that he is required to make) a return of the income so derived by him, in such form and at such time as the Commissioner may require. (12) Nothing in the foregoing provisions of this section shall preclude the assessment for income tax otherwise than in accordance with this section of any income derived by a married woman and not assessable under this section, but in making any such assessment no regard shall be had to any aggregable income that is assessable under this section.

105. For the purposes of this Act every person shall be deemed to have derived income although it has not been actually paid to or received by him, or already become due or receivable, but has been credited in account, or reinvested, or accumulated, or capitalized, or carried to any reserve, sinking, or insurance fund, or otherwise dealt with in his interest or on his behalf.

Income credited in account or otherwise dealt with. 1923, No. 21, s. 90

106. (1) Where at any time before or after the passing of this Act, but not earlier than the first day of October, nineteen hundred and thirty-six (being the date of the passing of the Mortgagors and Lessees Rehabilitation Act, 1936), any interest payable under any mortgage of real or personal property has been capitalized (whether under that Act or otherwise), the Commissioner may, if he thinks fit, determine the year or years in which it became payable, and the interest attributed to any year by any such determination of the Commissioner shall be deemed for the purposes of the last preceding section to have been .derived in that year. (2) Where it is proved to the satisfaction of the Commissioner that any interest that has been capitalized as mentioned in the last preceding subsection has become a bad debt and has in any income year (whether before or after the passing of this Act) been actually written off as a bad debt by the person by whom it is deemed to have been derived, the amount so written off shall, in calculating the assessable income of that person for that year, be deducted from his total income for that year: Provided that all amounts at any time received on account of any such bad debt shall be deemed to be assessable income derived in the year in which they are received.

Capitalization of mortgage interest. 1939, No. 3, s. 18

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(3) For the purpose of giving effect to the provisions of this section the Commissioner may at any time alter any assessment, notwithstanding anything to the contrary in section twenty-eight hereof. 107. (1) In calculating the assessable income derived by any person from any source no deduction shall be made in respect of any of the following sums or matters—namely, the repair of premises, or the repair, alteration, or supply of implements, utensils, or machinery used in the production of income, beyond the sum usually expended in any year for those purposes: Provided that in cases where depreciation of such premises, implements, utensils, or machinery, whether caused by fair wear and tear or by the fact of such premises, implements, utensils, or machinery becoming obsolete or useless, cannot be made good by repair, the Commissioner may allow such deduction as he thinks just: Provided also that where the Commissioner has, for any year of assessment (whether before or after the coming into operation of this Act), allowed a deduction in respect of the depreciation of any premises, implements, utensils, or machinery, and the taxpayer at any time afterwards sells such premises, implements, utensils, or machinery at a price in excess of the amount to which the value of those assets has been reduced by such allowance, the Commissioner may make a revised assessment for that or any subsequent year without allowing such deduction or without allowing such portion thereof as he thinks fit, and may recover the additional amount of income tax accordingly. For the purpose of giving effect to the provisions of this proviso the Commissioner may at any time alter any assessment, notwithstanding anything to the contrary in section twenty-eight hereof: Provided further that where the Commissioner is satisfied that any repairs or alterations of any premises, plant, or machinery do not increase the capital value of the premises, plant, or machinery, or that the repairs or alterations increase that value by an amount less than the cost of the repairs or alterations, he may allow such deduction as he thinks just.

Deductions for repair, maintenance, and depreciation. 1923, No. 21, s. 80 (1) (a) 1930, No. 8, s. 6 1945, No. 37, s. 16 1948, No. 78, s.10(1), (3)

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(2) For the purposes of the second proviso to subsection one of this section, — (a) Where any asset has been sold together with other assets of a business, the part of the consideration attributable to that asset shall be determined by the Commissioner, and the part of the consideration so determined shall be deemed to be the price at which that asset was sold by the vendor and purchased by the purchaser: (b) Where any property is sold, distributed, or otherwise disposed of without consideration or for a consideration which, in the opinion of the Commissioner, is less than the market price or the true value of the property on the day it was sold, distributed, or otherwise disposed of, that property shall be deemed to have been sold at and to have realized such market price or, if there is no market price, shall be deemed to have been sold at and to have realized such price as the Commissioner determines. (3) It shall be a ground for an objection to an assessment of income tax under Part 111 of this Act that any determination of the Commissioner made for the purposes of subsection two of this section is erroneous in fact. (4) Without limiting the discretion of the Commissioner under subsection one of this section, it is hereby declared that he has power and has always had power to refuse in whole or in part to allow any deduction under that paragraph in any case where he is not satisfied that complete and satisfactory accounts have been kept by or on behalf of the taxpayer and that sufficient depreciation has been provided for in the taxpayer's accounts. (5) The provisions of sections one hundred and ten, one hundred and eleven, one hundred and fourteen, one hundred and seventeen, one hundred and eighteen, one hundred and twenty-four, and one hundred and twentyseven hereof shall have effect notwithstanding anything to the contrary in this section and sections one hundred and twelve and one hundred and thirteen hereof.

1923, No. 21, s. 81 (3) 1936, No. 34, s.B (1) 1939, No. 34, s. 15 1944, No. 28, s. 6 (2) 1945, No. 37, s. 12 (1) 1949, No. 29, s 6 (1) 1950, No. 87, 5.9 (1)

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Special depreciation allowance on buildings and plant. 1945, No. 37, s. 15 1950, No. 87, s. 7

108. (1) Where the Commissioner is satisfied that any premises, plant, or machinery has been acquired, erected, installed, or extended by a taxpayer on or after the first day of April, nineteen hundred and forty-five, and not later than the thirty-first day of March, niner teen hundred and fifty-two, the Commissioner may, in his discretion, in calculating the assessable income derived by the taxpayer, allow, in addition to the depreciation allowed as a deduction under subsection one of the last preceding section, such deduction by way of special depreciation in accordance with this section as he thinks just. (2) The amount of any deduction allowed under this section in respect of any premises, plant, or machinery shall not exceed in the aggregate thirty per cent of the cost of the premises, plant, or machinery. (3) Unless in any case the Commissioner otherwise determines, the amount of any deduction allowed under this section in respect of any premises, plant, or machinery shall be allowed in respect of the income derived by the taxpayer during the period of five years from the date on which the taxpayer has commenced to use the premises, plant, or machinery in the production of assessable income, at the following rates:— (a) Ten per cent in respect of the first year: (b) Eight per cent in respect of the second year: (c) Six per cent in respect of the third year: (d) Four per cent in respect of the fourth year: (e) Two per cent in respect of the fifth year. (4) The second proviso to subsection one of the last preceding section is hereby extended to apply with respect to every deduction allowed under this section in respect of any premises, plant, or machinery. (5) Without limiting the discretion of the Commissioner under this section, it is hereby declared that he may refuse in whole or in part to allow any deduction under this section in any case where he is not satisfied that complete and satisfactory accounts have been kept by or on behalf of the taxpayer and that sufficient depreciation has been provided for in the taxpayer's accounts. (6) All references in this section to " the taxpayer ", in relation to any taxpayer who has died after acquiring, erecting, installing, or extending any premises, plant,

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or machinery, shall be deemed to be references to his personal representatives and to the trustees of his estate and (so far as the Commissioner thinks just and equitable) to the beneficiaries of the taxpayer's estate.

109. (1) Where the Commissioner is satisfied that a taxpayer engaged in any farming or agricultural business on any land in New Zealand has, during any income year within the period specified in subsection five of this section, — (a) Acquired or installed any plant, machinery, or equipment to be used wholly for the purpose of that business; or (b) Acquired or erected any building in order to provide accommodation for any person employed on the land by the taxpayer in connection with that business, — the Commissioner may in his discretion, subject to the provisions of this section, allow as a deduction in calculating the assessable income derived by that taxpayer from the business in the year in which the asset is acquired, installed, erected, or first used for the purposes of that business an initial depreciation allowance of thirty per cent of the cost price of that plant, machinery, equipment, or building. (2) The initial depreciation allowance authorized by subsection one of this section shall be in addition to any deduction which may be allowed under subsection one of section one hundred and seven hereof. (3) Where the taxpayer elects to receive an initial depreciation allowance under this section in respect of any plant, machinery, equipment, or building, he shall not be entitled to any special depreciation allowance in respect of that plant, machinery, equipment, or building under the last preceding section. (4) Without limiting the discretion of the Commissioner under this section, it is hereby declared that the Commissioner may refuse in whole or in part to allow any deduction under this section — (a) In any case where he is of the opinion that the cost of any item of plant, machinery, or equipment acquired or installed is not of sufficient magnitude to warrant a depreciation allowance under this section:

Initial depreciation allowance on farm equipment and accommodation for farm workers. 1950, No. 87, s. 8

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(b) In any case where he is not satisfied that such records as may be required by him have been kept by or on behalf of the taxpayer: (c) In any case where he is satisfied that any such building has been acquired or erected for the accommodation of the taxpayer or the wife or a child of the taxpayer. (5) This section shall apply only where the plant, machinery, equipment, or building was acquired, installed, erected, or first used by the taxpayer after the thirty-first day of March, nineteen hundred and fifty, and before the first day of April, nineteen hundred and fifty-three, but shall not apply with respect to tax for any year of assessment commencing before the first day of April, nineteen hundred and fifty-one, or later than the first day of April, nineteen hundred and fifty-three.

Deduction of certain expenditure on land used for farming or agricultural purposes. 1950, No. 87, s. 9

110. (1) Any taxpayer engaged in any farming or agricultural business on any land in New Zealand shall, in calculating the assessable income derived by him from that business in any income year, be entitled to deduct—(a) Any expenditure incurred in that business during the income year, and not deductible otherwise than under this section, in—(i) The eradication or extermination of animal or vegetable pests on the land: (ii) The felling, clearing, destruction, and removal of timber, stumps, scrub, or undergrowth on the land: (iii) The destruction of weeds or plants detrimental to the land: (iv) The preparation of the land for farming or agriculture, including the cultivation and grassing thereof, but excluding expenditure incurred in respect of any of the items specified in paragraph (b) of this subsection: (b) Any expenditure incurred in that business during the income year, and not deductible otherwise than under this section, in—(i) The draining of swamp or low lying lands: (ii) The construction of access roads or tracks to or on the land:

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(iii) The construction of dams, stopbanks, irrigation or stream diversion channels, or other improvements for the purpose of conserving or conveying water for use on the land or for preventing or combating soil erosion: (iv) The repair of flood or erosion damage: (v) The sinking of bores or wells for the purpose of supplying water for use on the land: (vi) The construction of aeroplane landing strips to facilitate aerial topdressing of the land: (vii) The construction on the land of fences, including the purchase of wire or wire netting for the purpose of making new or existing fences rabbit proof: Provided that the maximum amount of expenditure allowable as a deduction for the income year under this paragraph shall not exceed in the aggregate the sum of two hundred pounds. (2) Where any land together with the improvements thereon is sold by the taxpayer within five years from the date of his acquisition of that land and the taxpayer has been allowed as a deduction in calculating his assessable income expenditure in respect of that land which but for this section would not have been allowable as a deduction, the amount by which the selling price of the land and improvements exceeds the aggregate amount consisting of the original purchase price and any expenditure on improvements for which no deduction has been allowed in calculating his assessable income shall be deemed to be assessable income derived by the taxpayer in the year in which the property is sold, to the extent of the total deductions allowed under this section since the acquisition of the land: Provided that, if the taxpayer so elects, the Commissioner may, notwithstanding anything to the contrary in section twenty-eight hereof, make a revised assessment or assessments in respect of any year in which a deduction has been allowed under this section without allowing that deduction or without allowing such portion thereof as he thinks fit, and may recover the additional amount of tax accordingly.

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(3) This section shall apply with respect to the tax for the year of assessment commencing on the first day of April, nineteen hundred and fifty-one, and for every subsequent year.

Deductions for deferred maintenance. 1944, No. 28, s. 6 3950, No. 22, s. 4

111. (1) For the purposes of this section the expression " deferred maintenance in relation to 6 any taxpayer, means such maintenance of assets used i by the taxpayer in the production of his assessable income as is necessary by reason of the fact that the taxpayer has been prevented from maintaining those assets in a proper and reasonable manner by conditions arising out of the present war, whether arising before or after the termination of the war. (2) The Commissioner, in calculating the assessable income of any taxpayer for any income year, may, subject to the provisions of this section, allow such deduction as he thinks fit in respect of deferred maintenance. No deduction shall be allowed under this section of any amount less than one hundred pounds. (3) Application for a deduction under this section shall be made by or on behalf of the taxpayer in such form and in such manner as the Commissioner may from time to time prescribe. (4) Every such application shall be made before the end of the income year to which the application relates or within such further time as the Commissioner in his discretion allows in any case or class of cases. (5) Every taxpayer who applies for a deduction under this section shall deposit with the Commissioner, or as he directs, the amount of the deduction applied for. Every amount so deposited shall be paid into the Public Account to the credit of the Consolidated Fund. (6) Where the Commissioner refuses the application or allows the deduction of an amount less than the amount deposited, the amount of the deposit or the amount by which it exceeds the amount of the deduction allowed, as the case may be, shall forthwith be refunded to the taxpayer, without interest. (7) Upon application in that behalf made to the Secretary to the Treasury by or on behalf of the taxpayer or his personal representatives the whole or any part of any deposit made under this section shall be refunded without interest:

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Provided that, unless the Minister of Finance in any case otherwise determines, — (a) No refund shall be made under this section before the expiration of one year after the date of the making of the deposit: (b) No refund shall be made of any amount that is less than fifty pounds or the balance of the deposit, whichever is the less. (8) Every amount refunded under the last preceding subsection shall be deemed to be assessable income derived by the taxpayer or by his personal representatives during the income year in which the refund is made: Provided that where the application for the refund is made by the personal representatives of a deceased taxpayer within six months after the date of the granting of probate of his will or letters of administration of his estate, or within such further time as the Commissioner in his discretion allows, and a request in that behalf is made in the application, the amount of the refund shall be deemed to be assessable income derived by the taxpayer immediately before his death. (9) All moneys payable under this section by way of refund shall, without further appropriation than this section, be paid by the Minister of Finance out of the Consolidated Fund. (10) Any public authority, any corporation sole, any company or other incorporated body, any unincorporated body of persons, any trustee or trustees (including any statutory trustee or trustees or board of trustees), or any other person may, unless expressly prohibited by any Act or by any instrument of trust, make applications for deductions and make deposits under this section. (11) Where the amount of any deposit made under this section or any part thereof has been borrowed by the taxpayer, the Commissioner, in calculating the assessable income of the taxpayer for any income year, may allow as a deduction the amount of any interest that the Commissioner is satisfied is payable in respect of any period during that year on the moneys so borrowed or on so much thereof as does not exceed the amount of the deposit during that period.

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(12) For the purpose of interpretation of the terms " the present war " and " the war " used in this section, this section shall be deemed to have been enacted on the fifteenth day of December, nineteen hundred and fortyfour, being the date of passing of the Land and Income Tax Amendment Act, 1944.

112. In calculating the assessable income derived by any person from any source, no deduction shall be made in respect of any of the following sums or matters: — (a) Investment, expenditure, loss, or withdrawal of capital; money used or intended to be used as capital; money used in the improvement of premises occupied; interest which might have been made on such capital or money if laid out at interest: (b) Bad debts, except debts which are proved to the satisfaction of the Commissioner to have been actually written off as bad debts by the taxpayer in the income year: Provided that all amounts at any time received on account of any such bad debt shall be credited as income in the year in which they are received, and shall be subject to tax accordingly: (c) Any expenditure or loss recoverable under any insurance or contract of indemnity: (d) Payments of any kind made by a husband to his wife or by a wife to her husband: (e) Bent of any dwellinghouse or domestic offices, save that, so far as such dwellinghouse or offices are used in the production of the assessable income, the Commissioner may allow a deduction of such proportion of the rent as he may think just and reasonable: (/) Income tax or social security charge: (9) Interest, except so far as the Commissioner is satisfied that it is payable on capital employed in the production of the assessable income.

Other deductions not permitted from assessable income. 1923, No. 21, s.BO (1) (&) to (h) 1932-33, No. 40 s. 7 1939, No. 34, s. 32

Deduction of expenditure or loss from income. 1923, No. 21, s. 80 (2)

113. In calculating the assessable income of any person deriving such income from one source only, any expenditure or loss exclusively incurred in the production of the assessable income for any income year may be deducted from the total income derived for that year. In

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calculating the assessable income of any person deriving such income from two or more sources, any expenditure or loss exclusively incurred in the production of assessable income for any income year may be deducted from the total income derived by the taxpayer for that year from all such sources as aforesaid. Save as herein provided, no deduction shall be made in respect of any expenditure or loss of any kind for the purpose of calculating the assessable income of any taxpayer.

114. (1) For the purposes of this section any loss incurred by a taxpayer shall be ascertained in accordance with the provisions of this Act for the calculation of assessable income. (2) Any taxpayer who satisfies the Commissioner that he has in any year incurred a loss shall be entitled to claim that such loss be carried forward, and, so far as may be, deducted from or set off against his assessable income for the three following years: Provided that any relief under this section shall be given so far as possible from the first assessment within the aforesaid period of three years, and, so far as it cannot then be given, shall be given from the next assessment, and so on: Provided also that—(a) Where, if a profit had been made from the transaction in which the loss was incurred, the amount of the profit would not have been assessable income, no relief shall be given under this section in respect of that loss: (b) Where, if a profit had been made as aforesaid, the amount of the profit would have been assessable income, the amount of the loss carried forward to any year shall be deducted from or set off against the taxpayer's assessable income for that year so far as that earned income extends. (3) Notwithstanding anything in the foregoing provisions of this section, if in respect of any year of assessment any taxpayer, being a company, claims to carry forward any loss made by it in any former income year, the claim shall not be allowed unless the Commissioner is satisfied that the shareholders of the company on the last day of the income year immediately preceding the year of assessment were substantially the same as the

Losses incurred may be set off against future profits. 1923, No. 21, s. 81 1936, No. 34, s. 9 1939, No. 34, s. 19 1945, No. 37, s. 18 1950, No. 22, s. 4

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shareholders of the company on the last day of the income year in which the loss was incurred. For the purposes of this subsection the shareholders of a company at any date shall not be deemed to be substantially the same as the shareholders on any other date unless, on both such dates, not less than three fourths of the paid up capital of the company was held by or on behalf of the same persons, nor unless, on both such dates, not less than three fourths in nominal value of the allotted shares in such company were held by or on behalf of the same persons. For the purposes of this subsection shares in a company held by or on behalf of another company shall be deemed to be held by the shareholders of such last mentioned company and shares held by or on behalf of the trustee of the estate of a deceased shareholder, or by or on behalf of the persons entitled to those shares as beneficiaries under the will or intestacy of a deceased shareholder, shall be deemed to be held by that deceased shareholder.

Amounts remitted to be taken into account in computing income. 1939, No. 34, s. 17

115. (1) Where the amount of any expenditure or loss incurred by a taxpayer has been taken into account in calculating his assessable income for any income year, and subsequently the liability of the taxpayer in respect of that amount is remitted in whole or in part, the assessable income derived by the taxpayer during that year shall be deemed to be increased by the amount so remitted, and the taxpayer shall be assessable and liable for income tax accordingly. (2) Where the amount of any expenditure or loss incurred by a taxpayer has been taken into account in calculating for the purposes of the last preceding section the amount of any loss incurred by him in any income year, and subsequently the liability of the taxpayer in respect of that amount has been remitted in whole or in part, the amount of the loss that may be carried forward under the last preceding section shall be deemed to be reduced by the amount so remitted. (3) For the purposes of this section a liability in respect of any expenditure or loss shall be deemed to have been remitted to the extent to which the taxpayer has been discharged from that liability without fully adequate consideration in money or money's worth.

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116. (1) When income is derived by any person in any year by way of fines, premiums, or payment for goodwill on the grant of a lease, or in any other like manner by way of anticipation, the Commissioner may, if he thinks fit in his discretion, at the request of that person during the next succeeding year, apportion that income between the income year and any number of subsequent years not exceeding five, and the part so apportioned to each of those years shall be deemed to have been derived in that year, and shall be assessable for income tax accordingly. (2) Any such apportionment may be at any time cancelled by the Commissioner, and thereupon the income so apportioned or the part thereof on which income tax has not yet been paid shall become assessable for income tax as if derived during the year preceding that in which the apportionment was so cancelled. (3) Any such apportionment made before the coming into operation of this Act under the corresponding provisions of any Act hereby repealed shall be deemed to have been made under this Act, and shall operate accordingly.

1 Apportionment P of income received in * anticipation. , 1923, No. 21, t S - 107 fc ) >

117. The Commissioner may, in calculating the assessable income of any taxpayer, allow such deduction as he thinks fit in respect of expenditure incurred by the taxpayer during the income year for the preparation, stamping, and registration of any lease of property used in the production of his assessable income, or of any renewal of any such lease, or in borrowing of money employed by the taxpayer as capital in the production of assessable income.

Expenditure incurred in borrowing money or obtaining lease. 1939, No. 34, s. 15

118. (1) The Commissioner may, in the calculation of the assessable income of any taxpayer, allow such deduction as he thinks fit in respect of any premium, fine, or foregift, or any consideration in the nature of a premium, fine, or foregift, paid by the taxpayer in respect of the lease of any machinery used by Tn'm in the production of income, or in respect of the renewal of any such lease, or in respect of the assignment or transfer of any such lease. (2) In ascertaining the amount that may be deducted in any year under this section the total amount paid by the taxpayer as aforesaid shall be apportioned by the Commissioner over the period of the lease unexpired

Deduction in respect of premium paid on account of leased machinery. 1936, No. 34, s. 8

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at the date of payment, and the amount deducted for any year shall not in any case exceed the amount apportioned to that year.

Year in which land tax is deductible. 1940, No. 3, s. 6

119. For the purpose of calculating the assessable income of any person in accordance with sections one hundred and seven, one hundred and twelve, and one hundred and thirteen hereof, land tax payable for any year of assessment in respect of land used in the production of assessable income shall be deemed to be an expense incurred during the year in which that land tax is assessed, and the deduction (if any) allowable in respect thereof under the said section one hundred and thirteen shall be computed accordingly.

— • 120. (1) Where any trading stock is sold together with other assets of a business the part of the consideration attributable to the trading stock shall, for the purposes of this Act, be determined by the Commissioner, and the part of the consideration so determined shall be deemed to be the price paid for the trading stock by the purchaser. (2) For the purposes of this section any trading stock which has been disposed of otherwise than by sale shall be deemed to have been sold, and any trading stock so disposed of and any trading stock which has been sold for a consideration other than cash shall be deemed to have realized the market price of the day on which it was so disposed of or sold, but, where there is no market price, trading stock shall be deemed to have realized such price as the Commissioner determines. (3) It shall be grounds for objection to an assessment of income tax under Part 111 of this Act that any determination of the Commissioner made for the purposes of this section is erroneous in fact.

Income derived from disposal of trading-stock. 1926, No. 24, s. 5

Valuation of trading stock, < including livestock. 1939, No. 34, s. 16

121. (1) For the purposes of this section the term " trading stock " includes anything produced or manufactured, and anything acquired or purchased for purposes of manufacture, sale, or exchange; and also includes livestock; but does not include land. (2) Where any taxpayer carries on any business the value of his trading stock at the beginning and at the end of every income year shall be taken into account in ascertaining whether or not he has derived assessable income during that year.

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(3) The value of the trading stock of any taxpayer to be taken into account at the beginning of any income year shall be its value as at the end of the last preceding income year: Provided that where the taxpayer's business is commenced and his trading stock is acquired during the income year the value of the trading stock as at the beginning of the income year shall be deemed to be an amount equal to its cost price. (4) Subject to the provisions of subsection nine of this section, the value of the trading stock of any taxpayer to be taken into account at the end of any income year shall be, at the option of the taxpayer, its cost price, its market selling value, or the price at which it can be replaced. (5) Where the value of the trading stock of any taxpayer at the end of the income year exceeds the value of his trading stock at the beginning of that year the amount of the excess shall be included in his assessable income for that year. (6) Where the value of the trading stock of any taxpayer at the beginning of any income year exceeds the value of his trading stock at the end of that year the amount of the excess shall be allowed as a deduction in computing the assessable income of the taxpayer for that year. (7) Where in any income year the whole or any part of the assets of a business carried on by any taxpayer is sold or otherwise disposed of (whether by way of exchange, or gift, or distribution in terms of a will, or on an intestacy, or otherwise howsoever, and whether or not in the ordinary course of the business of the taxpayer or for the purpose of putting an end to that business or any part thereof), and the assets sold or otherwise disposed of consist of or include any trading stock, the consideration received or receivable for the trading stock or (in any case where section one hundred and twenty or section one hundred and twenty-two hereof applies) the price which under that section the trading stock is deemed to have realized shall be taken into account in computing the taxpayer's assessable income for that year, and the person acquiring the trading stock shall, for the purpose of computing his assessable income for that year or for any subsequent income year, be deemed to have purchased it at the amount of that consideration or price.

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(8) Subject to the provisions of sections one hundred and twenty and one hundred and twenty-two hereof, the price specified in any contract of sale or arrangement as the price at which any trading stock is sold or otherwise disposed of as aforesaid shall be deemed for the purposes of this section to be the consideration received or receivable for the trading stock. (9) Notwithstanding anything to the contrary in subsection four of this section, any taxpayer who derives income from livestock may with the concurrence of the Commissioner adopt and fix a standard value in respect of that livestock or in respect of any class of such livestock. In any case where a standard value has been so fixed the taxpayer may adopt or the Commissioner may require the adoption of the true value instead of the standard value, or the taxpayer may, with the concurrence of the Commissioner, adopt another standard value instead of the standard value fixed as aforesaid: Provided that the adoption of a standard value, or the adoption of the true value instead of a standard value, or any alteration in the standard value as herein provided shall first take effect at the end an.d for the purposes of the income year or other period to which any return of assessable income relates.

Sale of trading stock for inadequate consideration, 1949, No. 29, s. 9

122. (1) Where any trading stock is sold or otherwise disposed of without consideration in money or money's worth or for a consideration that is less than the market price or the true value thereof on the day of the sale or other disposition, the following provisions shall apply, namely (a) The trading stock shall be deemed for the purposes of the principal Act to have been sold at and to have realized the market price of the .day of the sale or other disposition, but, where there is no market price, shall be deemed to have been sold at and to have realized such price as the Commissioner determines: (b) The price which under this section the trading stock is deemed to have realized shall be taken into account in calculating the assessable income of the person selling or otherwise disposing of the trading stock:

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(c) The person acquiring the trading stock shall, for the purpose of calculating his assessable income, be deemed to have purchased the trading stock at the price which under this section the trading stock is deemed to have realized. (2) It shall be grounds for objection to an assessment of income tax that any determination of the Commissioner made for the purposes of this section is erroneous in fact. (3) For the purposes of this section the term " trading stock " includes anything produced or manufactured, and anything acquired or purchased for purposes of manufacture, sale, or exchange; and also includes livestock; but does not include land.

123. (1) This section applies in every case where the Commissioner is satisfied that, upon the sale or other disposition of a substantial part of the livestock of a farming business from which a taxpayer derives assessable income, the assessable income derived by the taxpayer during the income year in which the sale or other disposition took place is, by reason of the adoption of a standard value in respect of the livestock that was less than the true value thereof at the date of the sale or other disposition, increased to an amount that substantially excee.ds the average assessable income of the taxpayer. (2) In any case to which this section applies the Commissioner, upon application in that behalf made in writing by or on behalf of the taxpayer not later than twelve months after the date of the sale or other disposition, may—- ./ (a) Amend the standard value adopted by the taxpayer in respect of that, livestock as at the commencement of that income year, and as at the end of any number of earlier income years not exceeding three, by such amounts as he deems just and equitable; and (Jx). At any time, notwithstanding anything to. the contrary in section twenty-eight hereof, amend accordingly any assessment or assessments of the taxpayer. , i

Spreading off ' ; excess income ! derived on salei:. ; of livestock where unduly low standard values adopted. 1949, No. 29, s. 8

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(3) For the purposes of this section the averageassessable income of any taxpayer shall be deemed to be the average annual amount of the assessable income derived by the taxpayer from the farming business concerned during the three income years immediately preceding the year in which the sale or other disposition took place or during the period in which the taxpayer has derived assessable income from that business, whichever period is the shorter. (4) If any question arises as to whether any sale or other disposition of livestock is a sale or other disposition of a substantial part of the livestock of a farming business for the purposes of this section, it shall be determined by the Commissioner, and his decision shall be final.

124. (1) The Commissioner may, in calculating the assessable income derived by any taxpayer from the business of farming, allow as a deduction any expenditure incurred by the taxpayer during the income year in planting or maintaining trees planted to provide shelter or to prevent erosion or otherwise for agricultural or pastoral purposes, or in erecting or maintaining fences to protect any such trees. (2) If any question arises as to whether any trees have been planted to provide shelter or to prevent erosion or otherwise for agricultural or pastoral purposes, a certificate of a duly authorized officer of the Department of Agriculture or of the New Zealand Forest Service as to the purpose for which the trees were planted shall be final and conclusive evidence thereof for the purposes of this section and of the next succeeding section.

Farmers 7 expenditure oil tree planting. 1949, No. 29, s. 6

125, (1) Where a taxpayer derives income in any income year from the sale of timber from trees planted to provide shelter or to prevent erosion or otherwise for agricultural or pastoral purposes on farming land owned or occupied by the taxpayer, the Commissioner may, upon application made in writing by or on behalf of the taxpayer not later than twelve months after the end of that income year, apportion that income between that income year and any number of subsequent years not exceeding four, and in every such case the amount of income so apportioned to any income year shall be deemed to have been derived in that year.

Spreading of ineome derived from sale of timber from farms. 1949, No. 29, s. 7

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(2) Any apportionment made under this section may be at any time cancelled by the Commissioner, and in every such case the whole of the income so apportioned shall be deemed to have been derived in the income year immediately preceding the year in which the apportionment is cancelled, except to the extent to which the income has been apportioned to and assessed for any earlier income year. (3) For the purposes of this section the term ' 4 timber " shall be deemed to include standing timber, and the term " sale " shall be deemed to include any disposition by way of a licence or easement, or the grant of any right of taking any profits or produce from land. (4) This section shall not apply in any case where the business of the taxpayer includes the sale of timber.

126. (1) Where any taxpayer sells any patent rights, any sum received by him or owing to him in respect of the sale, after deducting the appropriate amount specified in subsection two of this section (so far as that amount has not been otherwise allowed as a deduction from his assessable income for that or any other income year), shall be deemed to be assessable income and shall be deemed to be derived by the taxpayer during the income year in which the sum is received by or becomes owing to him, or at the option of the taxpayer, shall be deemed to be derived as to one sixth part thereof during that income year and as to one sixth part thereof during each of the five succeeding income years. (2) The total amount that may be deducted from any such sum shall, — {a) Where the taxpayer actually devised the invention to which the patent relates, be the amount of the expenditure incurred by the taxpayer in connection with the devising of the invention, or (where the sale does not include the whole of the patent rights in respect of the invention) such proportion of that expenditure as the Commissioner thinks just: (b) Where the taxpayer acquired the patent rights, be an amount bearing to the total cost of the patent rights to the taxpayer the same proportion as the unexpired term of the patent rights at the date of the sale bears to the unexpired term thereof at the date of their acquisition by the taxpayer.

Sums received from sale of patent rights. 1945, No. 37, s. 11 ISSO, No. 22, s. 4

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(3) For the purposes of this section and the next succeeding section the expression " patent rights " means the right to do or authorize the doing of anything which would, but for that right, be an infringement of a patent.

Deduction for sums expended on purchase of patent rights. 1945, No. 37, s. 12

127. (1) The Commissioner, in calculating the assessable income derived by any taxpayer during any income year, may allow such deduction as he thinks fit in respect of any sum expended by the taxpayer on the purchase of any patent rights used by him in the production of his assessable income for that income year. (2) In ascertaining the amount that may be deducted under this section in respect of any income year, the total amount payable by the taxpayer in respect of the purchase of any patent rights shall be apportioned by the Commissioner over the term of the patent rights unexpired at the date of the purchase, and the amount deducted in respect of any income year shall not in any case exceed the amount apportioned to that year. (3) Where, at any time before the expiry of any patent rights purchased by a taxpayer, the patent rights have come to an end without being subsequently revived or have been sold by the taxpayer, an amount bearing to the total sum expended by the taxpayer on the purchase of the patent rights the same proportion as the unexpired term of the patent rights at the date of their so coming to an end or being sold bears to their unexpired term at the date of their purchase by the taxpayer (so far as that amount has not been otherwise allowed as a deduction from his assessable income for that or any other income year), shall be allowed as a deduction from the assessable income derived by the taxpayer during the income year in which the patent rights have so come to an end or been sold. (4) All references in this section to " the taxpayer in relation to any taxpayer who has died after expending any sum on the purchase of any patent rights, shall be deemed to be references to his personal representatives and to the trustees of his estate, and (so far as the Commissioner thinks just and equitable) to the beneficiaries of the taxpayer's estate.

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128. (1) In calculating the assessable income derived by any taxpayer during any income year, the Commissioner may allow such deduction as he thinks fit in respect of any expenditure incurred by the taxpayer during that year in connection with the grant, maintenance, or extension of a patent used by him in the production of his assessable income for that year. (2) Where a patent has been granted in respect of any invention, the Commissioner, in calculating the assessable income derived during any income year by any taxpayer who has used the patent in the production of his assessable income for that year and who, whether alone or in conjunction with any other person, actually devised the invention, may allow such deduction as he thinks fit in respect of any expenditure incurred by the taxpayer in connection with the devising of the invention (not being expenditure in respect of which, Or of assets representing which, a deduction is otherwise allowable).

Deduction for patent expenses, 1945, No. 37, s. 12

129. In calculating the assessable income derived by any taxpayer during any income year, the Commissioner may allow such deduction as he thinks fit in respect of any expenditure incurred by the taxpayer during that year in connection with scientific research directly relating to the trade or business carried on by the taxpayer, except so far as the expenditure relates to an asset in respect of which a deduction for depreciation is allowable under subsection one of section one hundred and seven hereof.

Deduction for scientific research. 1945, No. 37, s. 14

130. (1) Notwithstanding anything to the contrary in this Act, where any property devised or bequeathed by will subject to the payment of an annuity has been transferred to a beneficiary, and that property or any property substituted therefor is charged with payment of the annuity or any part thereof, any amount paid in any income year on account of that annuity by the owner of that property or substituted property shall be allowed as a deduction in calculating the income derived by the owner from that property or substituted property in that income year, so far as that income extends: Provided that no deduction shall be allowed under this section where the owner for the time being of the property or substituted property (not being a beneficiary) is a person who has acquired the same by

Deduction df testamentary annuities charged on property. 1950, No. 87, s. 11

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purchase subject to the condition that he assumes the liability for payment of the whole or any part of the annuity charged thereon. (2) In this section the term " beneficiary ", in relation to any property, means a person to whom that property has been devised or bequeathed by will or a person who is entitled, pursuant to a provision in a will, to purchase, subject to payment of • an annuity, that property, being property which forms part of the estate of the testator, and which also forms part of the succession of that person in that estate for the purposes of the Death Duties Act, 1921.

131. (1) For the purpose of calculating in accordance with sections one hundred and seven, one hundred and twelve, and one hundred and thirteen hereof, the assessable income of any Minister of the Crown who has contributed any portion of the salary paid to him in any year under section ten of the Civil List Act, 1920, to any common fund established for the purposes of any scheme for augmenting the salaries of members of the General Assembly or of any class of such members, the portion of the salary so contributed shall be deemed to be an expense exclusively incurred in the production of that salary. (2) The amount by which the salary of any member of the General Assembly is augmented pursuant to any such scheme shall be deemed to be income derived by that member for the purposes of this Act.

Contributions by Ministers of the Crown to salary pool. 1940, No. 6, 3.12

132. (1) In calculating the taxable income of any employer the Commissioner may allow a deduction of any amount set aside or paid by the employer as or to a fund to provide individual personal benefits, pensions, or retiring allowances to employees of that employer: Provided that a deduction shall not be allowed under this section unless the Commissioner is satisfied that the fund has been established or the payment made in such a manner that the rights of the employees to receive the benefits, pensions, or retiring allowances have been fully secured. (2) The Commissioner shall have and be deemed to have always had an absolute discretion as to whether or not a deduction should be allowed under the last preceding subsection of the whole or any part of any amount set aside or paid as mentioned in that subsection.

Contributions to employees' superannuation; or benefit fund. 1923, No. 21, s. 82 1942, No. 2, s. 6

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133. (1) For the purposes of this section, — (a) The term " serving employee ", in relation to any employer, means a person who has (whether before or after the passing of this Act) been called up for service in any of His Majesty's naval, military, or air forces, whether on voluntary enlistment or otherwise, and whether within New Zealand or elsewhere, and who when he was so called up was employed by his employer in such circumstances that the whole or any part of the wages, salary, allowance, or other remuneration paid to him by his employer is allowable as a deduction in calculating the employer's assessable income; and the term 44 employer " has a corresponding meaning: (b) Any person who occupies or has occupied in relation to any company the position of director, by whatever name called, shall be deemed to be or to have been employed by the company. (2) In calculating the assessable income of any employer the Commissioner may allow as a deduction any moneys paid by that employer to any servingemployee, and not deductable otherwise than under this section, if the Commissioner is satisfied that the payment or payments have been made for the purpose of supplementing the income of the serving employee, or were in any manner induced by or due to the employment or former employment of the serving employee by the employer, or were otherwise directly or indirectly connected with or related to that employment or former employment: Provided that no deduction shall be allowed under this subsection in excess of the rates of the wages, salary, allowance, or other remuneration payable to the serving employee at the time when he was called up, or in excess of the rate of four pounds a week, whichever is the less. (3) The assessable income of any serving employee shall, for the purposes of this Act, be deemed to include all moneys paid to him by his employer and not forming part of his assessable income otherwise than by virtue of this section:

Payments to employees or former employees while on. naval, military, or air service. 1943, No. 2, s. 3 1950, No. 22, s. <1

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Provided that this subsection shall not apply with respect to any payment or payments if the Commissioner is satisfied that the payment or payments have not been made for the purpose of supplementing the income of the serving employee, and were not in any manner induced by or due to the employment or former employment of the serving employee by the employer, and were not otherwise directly or indirectly connected with or related to that employment or former employment. (4) The provisions of this section shall apply with respect to any moneys paid by any employer to any serving employee notwithstanding that the legal relationship of employer and employee may not in fact exist between them at the time of payment. (5) The payment of any moneys that are allowed as a deduction under subsection two of this section or are included in the assessable income of any person under subsection three of this section shall be deemed not to constitute a gift within the meaning of Part IV of the Death Duties Act, 1921.

134. (1) Where any person belonging to the New Zealand Naval Forces, the New Zealand Army, or the Royal New Zealand Air Force is a member of an emergency force, the pay earned by him as a member of that force shall be assessable for income tax, and income tax and social security charge shall be payable thereon in accordance with the provisions of this section. (2) There shall be payable in respect of the daily pay earned by and accruing each day to a member of an emergency force, and shall be deducted from that daily pay by the paying authority, a composite daily amount comprising—(a) A daily amount of income tax calculated in accordance with the provisions of this section and on the basis that the income tax payable each day is an amount equal to a three hundred and sixty-fifth part of the income tax which would have been payable if the same rate of pay as the member earned during that day had continued for a period of three hundred and sixty-five days and if the income tax had been calculated on that amount separately from and irrespective of any other income derived by the member; and

Income tax and social security charge payable by members of emergency force. 1950, No. 87, s. 14

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(b) A daily amount of social security charge calculated at the rate prescribed for the time being by the Social Security Act, 1938, in respect of salary or wages. (3) In calculating the daily amount of income tax payable in respect of pay earned by a member of an emergency force — (a) The income tax shall be calculated as if the member had derived no income other than his pay: (b) Notwithstanding anything to the contrary in any subsequent annual taxing Act, the rate of income tax applicable shall be the rate fixed by the annual taxing Act last passed before the day in respect of which the daily pay was earned: (c) The following special exemptions, and no others, shall be allowed as a deduction, namely:— (i) A special exemption under section eighty-eight hereof: (ii) Where the member is a married man, a special exemption under section eighty-nine hereof, computed as if the wife of the member derived no income: (iii) Where the member is a married woman, a special exemption under section ninety hereof, computed as if the husband of the member derived no income: (iv) Where the member has any dependent relative, a special exemption under section ninety-three thereof: (v) Where the member is a widow or widower or divorced person and has dependent children and employs a housekeeper, a special exemption under section ninety-one hereof: (d) The provisions of this Act limiting to a specified amount the reduction of tax by reason of any special exemption and section one hundred and four hereof (which relates to the aggregation of the incomes of husbands and wives), shall not apply with respect to the pay of any member of an emergency force assessed under this section.

1938, No. 7

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(4) Any income derived by a member of an emergency force from any source or sources other than pay received by him as a member of that force shall be separately assessable in the same manner as if he had not derived any pay as a member of an emergency force and had not been allowed any special exemption in calculating the tax payable in respect of that pay. (5) Any member of an emergency force who satisfies the Commissioner that the deduction of income tax from his pay in any income year in accordance with this section has resulted in a greater amount of income tax being paid than would have been payable if he had not been a member of an emergency force and had been in receipt of salary or wages equal to the amount of his pay may, within two years after the end of that income year, or within such further time as the Commissioner may allow, elect to have income tax on his pay assessed in the same manner as if this section had not been passed, and, in that event, the member so electing shall furnish a return of the income derived by him during the income year in which he received that pay and shall include in that return together with all other income derived by him the pay received by him in that year, and the member shall be assessable and liable for income tax in respect of the total income .derived by him in that income year in the same manner and to the same extent as if the foregoing provisions of this section had not been enacted, but shall be entitled to credit against the tax so assessed for any income tax which has been deducted or paid in respect of that income: Provided that where in any year income tax is deducted under this section in respect of pay derived during any period of less than three hundred and sixtyfive days, any adjustment or refund of tax under this subsection shall not reduce the income tax on that amount of pay below the amount that would be payable under subsections two and three of this section if there were allowed, in addition to the special exemptions under subsection three of this section, such other special exemptions not specified therein as the member is entitled to under this Act and any deduction to which the member would otherwise be entitled under section one hundred and thirteen hereof.

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(6) Where any income tax or social security charge that should have been deducted from the pay of a member of an emergency force has not been so deducted, the amount thereof may be deducted from any subsequent pay of the member, or may be recovered from the member as a debt due to the Crown. (7) In this section — " Member of an emergency force " means any person who, whether in New Zealand or outside New Zealand, belongs to any unit of the New Zealand Naval Forces, the New Zealand Army, or the Royal New Zealand Air Force which is declared by Order in Council to be an emergency force for the purposes of this section: " Pay " means any salary or wages payable to any member of an emergency force; and includes the amount of any allowances payable in conjunction therewith, except subsistence allowance, uniform allowance, mess allowance, travelling allowance, or the value of rations and quarters: " Paying authority ", in relation to an emergency force, means the branch of the New Zealand Naval Forces, the New Zealand Army, or the Royal New Zealand Air Force, as the case may be, responsible for accounting for the pay of that emergency force. Every paying authority shall, in respect of the income tax and social security charge deducted in accordance with this section, be deemed to be the agent of the Commissioner. (8) This section shall apply with respect to pay earned by a member of an emergency force during the income year that commenced on the first day of April, nineteen hundred and fifty, and during every subsequent income year. Provisions Relating to Companies and Associations

Companies carrying on business in Pacific Islands. 1923, No. 21, 8. 85

135. Any company resident in New Zealand and carrying on business exclusively in any of the islands of the Pacific Ocean, not being British possessions, shall be assessable for income tax only in respect of such part of its income as is received in New Zealand.

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136. (1) Where an association enters into transactions with its members, or with its members and others, any profit or surplus arising from those transactions which would be included in the profits or gains of the association if the transactions were not of a mutual character shall be deeme.d to be profits or gains arising from those transactions and to be assessable income of the association, except that, in computing the assessable income of the association, the Commissioner shall allow as expenses any sums which—(a) Represent a discount, rebate, dividend, or bonus granted or paid by the association to members or other persons in respect of amounts paid or payable by or to them on account of their transactions with the association; being transactions which are taken into account in computing the assessable income; and (b) Are calculated by reference to the said amounts or to the magnitude of the said transactions and not by reference to any share or interest in the capital of the association. Nothing in this section shall affect the extent of the exemption from income tax of any co-operative company to which the provisions of paragraph (/) of subsection one of section ninety-seven hereof are applicable, (3) Where any discount, rebate, dividend, or bonus is granted or paid to any person by an association, it shall form part of the assessable income of that person if the transaction from which it arises is of such a nature that any payment in respect thereof by that person to the association would be allowed as a deduction in computing the assessable income of that person, (4) For the purposes of this section, a discount, rebate, dividend, or bonus shall be deemed to have been granted to or paid to a person when it has been credited in account or otherwise dealt with in his interest or on his behalf. (5) In this section the term association " includes any body or association of persons, whether incorporated or not.

Profits of mutual associations in respect of transactions with members. 1950, No. 87, s. 10

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137. (1) In computing the taxable income for any year of any company to which this section applies, the Commissioner shall allow as expenses any amounts set aside or paid by the company during that year as or to a fund to provide for or recoup losses incurred or to be incurred by the company as a result of any action taken by the company before the end of that year to promote or give effect to an approved plan for the rationalization of the dairy industry by the elimination of unnecessary dairy factories, or by the limitation of the area from which milk or cream is permitted to be supplied to any dairy factory. This section does not apply with respect to any losses incurred or to be incurred by the company in respect of the elimination of any dairy factory belonging to the company, or in respect of the limitation of the area of supply of any dairy factory belonging to the company. (2) For the purposes of this section an approved plan means a plan approved by the Minister of Finance as being in his opinion in the public interest and in the interests of the dairy industry as a whole, and the term 4 4 losses " means the actual cost to the company of the action taken, reduced (in any case where the company has purchased any dairy factory so eliminated) by the proceeds of the sale of such land and tangible assets relating to that factory as may have been sold by the company, and by the selling value as determined by the Commissioner of any such land and tangible assets that may be retained by the company. (3) This section applies to every company which is not a co-operative company to which the provisions of paragraph (/) of subsection one of section ninety-seven of this Act are applicable, but which — (a) Is a company having for its object or one of its objects the manufacture of cheese, casein, dried milk, or butter, or two or more of such products from milk or cream supplied to the company, if the Commissioner is satisfied that the whole or substantially the whole of its income for the year in question is distributed solely amongst the suppliers in proportion to the quantity of milk or butterfat supplied by them to the company; or

Deductions in respect of payments by certain dairy companies to rationalization reserves. 1938, No. 13, a. 18

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(b) Is a company having for its object or one of its objects the sale of milk supplied to the company, if the Commissioner is satisfied that the whole or substantially the whole of its income for the year in question is distributed solely amongst the suppliers in proportion to the quantity of milk supplied by them to the company; or (c) Is a company having for its object or included in its objects both the objects specified in paragraph (a) and paragraph (b) hereof, if the Commissioner is satisfied that the whole or substantially the whole of its income for the year in question is distributed solely amongst the suppliers in proportion to the quantity of milk or butterfat supplied by them to the company.

138. (1) For the purposes of this section the term " banking company " means a company that before the thirteenth day of October, nineteen hundred and fortyone (being the date of passing of the Land and Income Tax Amendment Act, 1941), was assessable for income tax under section nine of the Land and Income Tax Amendment Act, 1932-33. (2) Subject to the provisions of this section, every banking company shall, in respect of income derived by it during any income year, be assessable and liable for income tax in the same manner as if it were a company other than a banking company. (3) For the purposes of this Part of this Act a banking company shall be deemed to be resident in New Zealand if its head office is in New Zealand, but not otherwise. (4) In the application of this Act to any banking company the following provisions shall apply:— (a) For the purposes of paragraph (a) of subsection one of section one hundred and seven hereof, the value as at the beginning of the income year ended on the thirty-first day of March, nineteen hundred and forty-one, of the assets used by the company in the production of assessable income during that income year shall be deemed to be an amount equal to the price paid therefor by the company, decreased

Assessment of banking companies. 1941, No. 18, s. 3

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by a sum fixed by the Commissioner as being the amount that would have been allowed as a deduction in respect of the depreciation of those assets in the calculation of the assessable income of the company for previous income years if the company had been a company other than a banking company. For the purposes of the second proviso to the said paragraph (a), the sum so fixed by the Commissioner shall be deemed to have been allowed as a deduction accordingly in respect of depreciation occurring before the beginning of the income year ended on the thirty-first day of March, nineteen hundred and forty-one: (b) In calculating the assessable income of the company for any income year no deduction shall be made under paragraph (c) of section one hundred and twelve hereof except in respect of debts which are proved to the satisfaction of the Commissioner to have become bad after the thirty-first day of March, nineteen hundred and thirty-two, and to have been actually written off' by the company in the income year. All amounts received during any such income year on account of any such bad debt or on account of any bad debt in respect of which a deduction has at any time been allowed under paragraph (c) of subsection one of section nine of the Land and Income Tax Amendment Act, 1932-33, shall be credited as income in the year in which they are or have been received, and shall be subject to tax accordingly: (c) If the date of the annual balance of the company's accounts is not the thirty-first day of March, the company shall be deemed to have elected with the consent of the Commissioner under section fourteen hereof to furnish returns of income for the year ending on the date of the annual balance of its accounts.

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1 139. Notwithstanding anything to the contrary in this Act, the following provisions shall apply to the income of a company carrying on the business of insurance or. guarantee against loss, damage, or risk of any kind whatever, except life, assurance: — (a) The assessable income of such a company shall not include income derived from insurance business carried on out of New Zealand: (b) The income of such a company shall not include sums recovered from persons or companies which do not carry on business in New Zealand in respect of losses on risks reinsured with such persons or companies, and no deduction shall be allowed from such income in respect of premiums paid for reinsurance with persons or companies not carrying on business in New Zealand.

Insurance companies other than life insurance companies. 1923, No. 21, s. 93 1925, No. 12, s. 5

140. (1) Notwithstanding anything to the contrary in this Act, every company engaged in carrying on in New Zealand the business of life insurance shall for the purposes of this Act be deemed to have derived and to derive profits from such business in accordance with the following provisions of this section, and such profits shall be deemed accordingly to be assessable income of such company. (2) In the case of any such company which makes to its policyholders, or to any class or classes of its policyholders, an annual allotment of surplus funds by way of reversionary bonuses or otherwise, the residue of the surplus funds so allotted for any year in respect of policies comprised in the New Zealand business of the company, after deducting therefrom any income derived by the company in that year and exempt from taxation t>y virtue of section ninety-seven hereof or otherwise howsoever, shall be deemed to be profits derived by the company in that year. (3) In the case of any such company which makes to its policyholders, or to any class or classes of its policyholders, an allotment of surplus funds by way of reversionary bonuses or otherwise at periodical intervals greater than a year, the residue of the surplus funds allotted for any period in respect of policies comprised in the New Zealand business of the company, after deducting therefrom any income derived by the company

Assessment of life insurance companies. 3930, No. 8, s. 9

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In that period and exempt from taxation by virtue of section ninety-seven hereof or otherwise howsoever, shall he deemed to be profits derived by the company during that period, and the average annual amount thereof shall be deemed to have been derived in each of the years wholly or partly included in that period. (4) If any company to which this section applies has for any year or other period paid any dividends to shareholders out of profits derived from its business of life insurance, there shall be added to its profits computed in the manner provided by subsection two or subsection three hereof, as the case may be, an amount equal to the additional amount that would have been allotted in respect of policies comprised in the New Zealand business of the company if the amount so paid to shareholders had been included in the surplus funds allotted for any year or other period as aforesaid by way of reversionary bonuses or otherwise among all the policyholders of the company entitled by virtue of their policies to share in its profits. (5) From the assessable income of any company for any year computed as hereinbefore in this section provided there shall be deducted all special exemptions to which the company may be entitled under this Act, and the residue shall be the taxable income of the company for that year. No company to which this section applies shall, in respect of its business of life insurance, be assessable for income tax otherwise than as provided in this section. (6) If for any year of assessment any company carrying on the business of life insurance as aforesaid is unable to furnish returns as to the profits derived or deemed to have been derived by it in accordance with the foregoing provisions of this section during the preceding year, its profits for that year shall be deemed to be not less than the profits derived by it in accordance with this section during the last preceding year for which returns are available, and income tax shall be assessed and payable thereon accordingly, and any adjustments, whether by way of the payment of additional tax or the refund of tax, shall be made as soon as practicable thereafter.

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(7) No company which carries on in New Zealand the business of life insurance shall hereafter be entitled to any exemption from income tax under paragraph (k) of subsection one of section ninety-seven hereof in respect of interest payable out of New Zealand. (8) For purposes of income tax the Government Life Insurance Department shall be deemed to be a company carrying on in New Zealand the business of life insurance, and shall be assessable and chargeable with income tax accordingly.

141. Unless otherwise provided in the annual taxing Act for any year, the amount of income tax payable by any company carrying on the business of life insurance (other than income tax payable in respect of income derived otherwise than from the business of life insurance or in respect of income derived from debentures issued by a company or by a local or public authority) shall be nine-twentieths of the amount that would be payable by the company if this section had not been passed.

Partial exemption of life insurance companies. 1923, No. 21, s. 96 1930, No. 8, s. 10 1936, No. 34, s. 10

142. (1) Notwithstanding anything to the contrary in this Act, if the Commissioner is satisfied that the sole or principal source of the income of a company, whether incorporated in New Zealand or elsewhere, is the business of gold mining, mercury mining, or scheelite mining in New Zealand, the taxable income .derived by that company in any year shall be deemed to be one half of the total sum paid as dividends during that year to the shareholders of the company if the aggregate amount of the dividends paid since the commencement of business by the company does not exceed twice the amount of the capital paid up in cash, an.d in every other case shall be deemed to be the total sum paid as dividends during that year, and the company shall be assessed and liable accordingly. (2) Notwithstanding anything to the contrary in section one hundred and fifty hereof, no company to which this section applies shall be deemed to be a proprietary company within the meaning of the said section one hundred and fifty. (3) Where the Commissioner is satisfied that any amount paid as dividends by any company to which this section applies (hereinafter in this subsection referred to as the holding company) consists of dividends received

Companies engaged in mining for gold, mercury, or scheelite. 1923, No. 21, s. 97 1931, No. 44, fa. 13 1940, No. 19, s. 10

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by the holding company from any other company to which this section applies, there shall be deducted from the tax payable by the holding company in respect of that amount a sum equal to the tax paid or payable by the other company in respect of that amount. For the purposes of this subsection the tax paid or payable by any company in respect of any amount included in the dividends paid or payable by it in any year shall be deemed to be computed at the rate ascertained by dividing the total tax paid or payable in respect of those dividends by the number of pounds included in the total dividends paid by the company in that year. (4) In relation to any company to which this section applies, section four hereof (which relates to the definition of the expression " dividends ") shall be construed as if the words 4 ' in excess of the amount paid up on his shares " were omitted from paragraph (e) of subsection one.

143. (1) This section applies to New Zealand companies in respect of which the Commissioner is satisfied that their sole or principal source of income is the business of mining in New Zealand for petroleum. (2) Notwithstanding anything to the contrary in this Act, the taxable income derived in any year by any company to which this section applies shall, except as hereinafter provided, be deemed to be the amount of dividends paid to shareholders in that year, but a company shall not be deemed to have derived taxable income in any year unless at the end of that year the aggregate amount of dividends theretofore paid to shareholders exceeds the aggregate amount theretofore expended by the company and deemed by the Commissioner for the purposes of this section to be irrecoverable. (3) For the purposes of this section the dividends paid to the shareholders of a company shall be deemed to include—(a) All sums distributed in any manner and under any name among the shareholders of the company: (b) The paid up value of any shares allotted by the company to any of its shareholders to the extent to which the paid up value represents the capitalization of the whole or any part of the profits of the company:

Assessment of petroleum mining companies. 1937, No. 36, s. 3 1938, No. 13, s. 17

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' (c) Any credit given by the company to any of its shareholders in respect of the amount unpaid on any shares that are not fully paid up: ~ > (d) The value of any other property of any kind whatsoever given by the company to any of its shareholders as such. (4) For the purposes of this section the aggregate amount expended by a company and deemed to be irrecoverable shall, 011 any date, be taken to be the aggregate amount theretofore expended by the company in development work in New Zealand in relation to prospecting or mining for petroleum, reduced by the selling value, as determined by the Commissioner, of assets (not including any petroleum that has not been recovered from the earth) resulting from such aggregate expenditure. If any difference arises between the Commissioner and any company as to whether any amount expended by the company was expended in development work in New Zealand as aforesaid the difference shall be determined by the Commissioner, subject to the company's right of objection to the Commissioner's assessment in accordance with the provisions of Part 111 of this Act. (5) The taxable income deemed under subsection two of this section to have been derived by any company in any year shall not exceed the amount by which at the end of that year the aggregate amount of the dividends theretofore paid to shareholders of the company exceeds the sum of the aggregate amount theretofore expended by the company and deemed to be irrecoverable as aforesaid and the aggregate taxable income of the company in former years. (6) Notwithstanding anything in the foregoing provisions of this section, if any company to which this section applies commences at any time to carry 011 in New Zealand or elsewhere the business of the refining, distribution, or transportation of petroleum (whether produced by it or not), or any other business not incidental to its business of mining in New Zealand for petroleum, it shall, for the year in which it commences to carry 011 any such business, be liable to income tax

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as if all the receipts theretofore derived by the company, reduced by the sum of the irrecoverable expenditure of the company and the aggregate taxable income of the company in former years, were taxable income of the company.

144. (1) Notwithstanding anything to the contrary in subsection three of the last preceding section, the dividends paid to the shareholders of a company shall for the purposes of that section be deemed not to include any returns of share capital made by the company in any year except to the extent by which the said returns of share capital exceed the amount (if any) by which the aggregate amount of the company's share capital paid up in cash before the end of that year exceeds the sum of the aggregate returns of share capital made by the company before the beginning of that year and the aggregate amount expended by the company before the end of that year and deemed by the Commissioner for the .purposes of that section to be irrecoverable. For the purposes of this subsection the expression " returns of share capital " means any sums distributed, any credits given, and the value of any other property distributed, by a company to any of its shareholders by way of return of share capital paid up in cash. (2) For the purposes of subsection six of the last preceding section, the following activities when carried on by any company shall be deemed to be incidental to its business of mining in New Zealand for petroleum and not to be part of the business of the refining, distribution, or transportation of petroleum, namely:— (a) The recovery of casinghead spirit from natural gas: (b) The transportation of crude petroleum or casinghead spirit from the point of production to gathering tanks or field storage tanks situated within the field of production: (c) The transportation of natural gas on the land comprised in any petroleum mining licence or petroleum prospecting licence held by the company or from any such land to any other such land:

Further provisions with respect to petroleum mining companies. 1938, No. 13 7 s. 17 1942, No. 14, s. 16

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(d) The transportation of crude petroleum, casinghead spirit, or natural gas by pipe-line or otherwise from the field of production to any storage-tank, refinery, railway, seaport, or other terminal within New Zealand, or from any such terminal to any other such terminal, for the purpose of storage or sale in accordance with paragraph (/) or paragraph (g) of this subsection: (e) The treatment of crude petroleum, casinghead spirit, or natural gas for the purpose of rendering it suitable for transportation in accordance with paragraph (b) or paragraph (c) or paragraph (d) of this subsection: (/) The storage of crude petroleum, casinghead spirit, or natural gas: (g) The sale of crude petroleum, casinghead spirit, or natural gas to any person carrying on business as a refiner or bulk distributor thereof or to any person for the purpose of export in accordance with the Petroleum Act, 1937, or any regulations made under that Act, or to any other purchaser for the time being approved in that behalf by the Minister of Finance for the purposes of this paragraph. (3) Any capital or other moneys expended by a company in connection with the transportation of crude petroleum, casinghead spirit, or natural gas in accordance with paragraph (d) of the last preceding subsection shall be deemed for the purposes of subsection four of the last preceding section not to be expended by the company in development work in New Zealand in relation to prospecting or mining for petroleum. (4) If any question arises as to whether any purchaser is a bulk distributor within the meaning of paragraph (g) of subsection two of this section, it shall be determined by the Minister of Finance, and his decision shall be final and conclusive. The Minister of Finance may from time to time approve any purchaser for the purposes of that paragraph either generally or in respect of specified purchases or classes of purchases, and either unconditionally or upon or subject to such conditions as that Minister thinks fit, and may at any time revoke any such approval or from time to time revoke, alter, or add to any such conditions.

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145. (1) If the Commissioner is satisfied with respect to two or more companies consisting substantially of the same shareholders or under the control of the same persons that the separate constitution or the separate continuance of those companies is not exclusively for the purpose of more effectively carrying out their objects, but is wholly or partly for the purpose of reducing their taxation, the Commissioner may, for the purposes of income tax, treat those companies as if they were a single company, and in any such case those companies shall be jointly assessed and jointly and severally liable, with such right of contribution or indemnity between themselves as is just. (2) For the purposes of this section two companies shall be deemed to consist substantially of the same shareholders if not less than one half of the paid up capital of each of them is held by or on behalf of shareholders in the other. Shares in one company held by or on behalf of another company shall for this purpose be deemed to be held by the shareholders in the lastmentioned company.

Two or more companies with substantially the same shareholders or under the same control, 1923, No. 21, s. 98 1939, No. 34, s. 20

146. (1) In this section — " Company " means a New Zealand company or a foreign company within the meaning of this Act: " New company " means a company carrying on business in New Zealand and consisting substantially of the same shareholders as an original company or being under the control of the same persons as an original company: '' Original company '' means a company which, having at any time carried on business in New Zealand, has whether before or after the passing of this Act, ceased to carry on business in New Zealand; and includes any such company that has been wound up. (2) For the purposes of this section a new company shall be deemed to consist substantially of the same shareholders as an original company if not less than one half of the paid up capital of the new company is held by or on behalf of shareholders in the original company. Shares in one company held by or on behalf of another company shall for the purposes of this subsection be deemed to be held by the shareholders in the last mentioned company.

Liability of new companies for tax payable by former companies with substantially the same shareholders or under the same control. 1937, No. 17, s. 21

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(3) Where an original company within the meaning of this section has been wound up its shareholders and directors, as on the commencement of its winding up, shall respectively be deemed to be the shareholders and the persons having the control of the company for the purposes of this section. (4) Where an original company as hereinbefore defined was, when it ceased to carry on business in New Zealand liable under this Act for any land tax or income tax or was liable to be assessed for any such tax, and such tax has not been paid, the new company shall, for the purposes of this Act, be deemed to be the agent of the original company and shall be liable for all tax payable by the original company. It shall also be liable for all tax for which the original company would have been liable if it had continued to carry on business in New Zealand.

147. (1) Where in any debenture issued by a company, whether before or after the coming into operation of this Act, the rate of interest payable in respect thereof is not specifically determined, but is determinable from time to time by reference to the dividend payable by the company or otherwise howsoever, the interest paid on the debenture shall be computed as part of the assessable income of the company and not of the debenture holder. (2) The provisions of the last preceding section shall not apply with respect to any such debenture or to the interest paid or payable thereunder.

Floating rate of interest on debentures. 1923, No. 21, s. 117

148. (1) For the purposes of this section, — (a) The expression " the amount of the debenture " means, in respect of any debenture, the principal sum expressed to be secured by or owing under that debenture: 5 (b) The expression " shareholder " includes, in respect of any company, a person by whom or on whose behalf shares in the company have at any time been held. (2) Where, whether before or after the passing of this Act, a company has issued debentures to its shareholders or to any class of its shareholders, and the amount of the debenture or debentures issued to each shareholder of the company or of that class has been determined by reference to the number or to* the

Interest on debentures issued in substitution for shares. 1940, No. 19, s. 11 1941, No. 18, s. 8

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nominal value or to the paid up value of, or by reference otherwise howsoever to the shares in that company or in any other company (whether or not that other company is being or has been wound up) that were held by or on behalf of the shareholder at the time the debentures were issued or at any earlier time, the interest paid by the company on the debentures so issued shall be computed as part of the assessable income of the company and not of the debentureholder. (3) The provisions of the last preceding section and of any other enactment shall apply with respect to all .debentures to which subsection two of this section applies and to the interest payable thereunder, in the same manner as if those debentures and that interest were debentures and interest of the kinds referred to in the last preceding section. (4) This section shall not apply or be deemed to have applied at any time since the thirtieth day of August, nineteen hundred and forty (being the date of the passing of the Finance Act (No. 2), 1940), with respect to any issue of debentures if more than one fourth of the debentures (computed by reference to the amount thereof) were transferred for a consideration in money or money's worth before that date.

149. (1) If the Commissioner is satisfied with respect to a shareholder in any company liable to income tax that the total income of that shareholder from all sources whether in New Zealand or elsewhere, during the income year did not exceed four hundred pounds, the Commissioner may pay to the shareholder an amount equal to the difference between the amount of tax paid or payable by the company in respect of an amount of its income equal to the dividends paid by it to the shareholder and the amount of tax that would have been payable by the shareholder in respect of those dividends if they had formed part of his taxable income: Provided that no payment shall be made by the Commissioner to any shareholder, pursuant to this section, of such an amount that the total amount received by that shareholder by way of dividends on his shares, together with the payment under this section, shall exceed six per cent of the total amount paid up in respect of his shares.

Payments to and debentureholders in certain cases. 1923, No. 21, s. 99 1929, N0.'12, s. 16

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(2) If the Commissioner is satisfied with respect to the holder of any debenture or debentures issued by any local or public authority or by any company that the aggregate amount of income tax paid or payable by or on behalf of the debentureholder (including the tax paid in respect of interest on debentures) exceeds the amount of tax that would have been payable by him if the interest received by him on those debentures had been assessable in the same manner as income received by him from other sources, the Commissioner shall, on application by the taxpayer, pay to him the amount of the excess. (3) Nothing in the last preceding subsection shall apply with respect to income tax paid by a company pursuant to any such contract, agreement, or arrangement as is mentioned in section two hundred and fortyfour hereof, and the said subsection (in so far as it applies to tax paid in respect of interest on .debentures) is hereby declared to be applicable only to such tax as is paid by the company as the agent of the debentureholder and is deducted by the company from the interest expressed by the debenture to be payable to the debentureholder. (4) All payments made by the Commissioner under this section may be paid as if they were refunds of tax paid in excess.

150. (1) The following provisions shall apply for the purposes of this section, namely:— {a) The term " proprietary company " means in respect of any income year a company which at the end of that year is under the control of not more than four persons or a company which at the end of that year is being or has been wound up and was at the commencement of the winding-up under the control of not more than four persons. For the purposes of this paragraph all the members of any partnership shall be deemed to be one person and all the persons interested in the estate of any deceased person (whether as trustees or as beneficiaries) shall be deemed to be one person: (b) The term " shareholder in respect of any income year, means a person by whom or on whose behalf shares in a proprietary companyare held at the end of that year; and includes a debentureholder:

Income of proprietary company in certain cases assessable to shareholders. 1939, No. 34, s. 23 1940, No. 3, s. 9 1940, No. 19, s. 12 1941, No! 18, ss. 5, 6 1946, No. 38, s. 7 1947, No. 6, s. 10 1950, No. 22, s. 4

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(c) The term " debentureholder in respect of any income year, means a person who at the end of that year holds debentures (being debentures of the kind referred to in section one hundred and forty-seven hereof) issued by a proprietary company; and includes any person on whose behalf any such debentures are held at the end of the income year: (d) The term " non-assessable income " means nonassessable income to which section eighty-six hereof applies: (e) The term " ordinary proprietary company " means a proprietary company the issued capital of which consists wholly of ordinary shares each of which has the same nominal value and is paid up to the same extent as and ranks in all respects equally with every other share, and which is not a company that has issued debentures of the kind referred to in section one hundred and forty-seven hereof: (/) The residual taxable income of any proprietary company for any income year shall be deemed to be the amount by which the taxable income of the company for that income year exceeds the total amount of the income tax and social security charge payable by the company in respect of income derived by it during that year: Provided that in the application of this section to any shareholder that is a company the residual taxable income of the proprietary company for any income year shall be deemed to be the amount of the taxable income of the proprietary company for that income year: (g) The total income of any proprietary company for any income year shall be deemed to be the total amount of the residual taxable income and non-assessable income of the company for that income year:

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(Ji) The total income derived in any income year by a proprietary company shall be deemed to be income derived in that year from the company by the. shareholders of the company. In the case of an ordinary proprietary company the total income shall be deemed to be derived by the shareholders in the proportions which the numbers of shares held by or on behalf of the shareholders respectively bear to the total number of shares issued by the company. In the case of a proprietary company other than an ordinary proprietary company the total income shall be deemed to be derived by the shareholders in proportions determined in such manner as may be prescribed by regulations made under this Act, or, in default of any such regulations or so far as they do not extend, in such proportions as the Commissioner thinks just and reasonable, having regard to the nature and relative importance of the interests of the shareholders in the company: (i) The term " proprietary income " means the income deemed under paragraph (Ji) of this subsection to' have been derived by a shareholder from a proprietary company in any income year in every case where that income is not less than one fifth of the total income of the company for that year. The proprietary income derived by a shareholder from any proprietary company in any income year shall be deemed to consist of assessable and nonassessable income in the proportions in which the total income of the company for that year consists of residual taxable income and nonassessable income: (j) Where pursuant to section one hundred and forty-five hereof the Commissioner treats as a single company two or more companies any one or more of which hold shares in another company, the companies so treated as a single company shall be deemed to be one shareholder of that other company, and, for the purposes of paragraph (a) of this subsection, to be one person:

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i! (A") Where two or more companies (hereinafter in this paragraph referred to as the holding companies) which are under the control of the same persons hold snch shares or debentures in any other company that if- the holding companies were a single company the other company would be a proprietary company from which that single company would derive ; proprietary income, the other company shall be deemed to be a proprietary company and the income derived therefrom by the holding companies shall be deemed to be proprietary income of the holding companies: (1) Proprietary income derived in any income year by a proprietary company shall be deemed to be part of the total income derived by that company in that income year. (2) The proprietary income derived by any shareholder in any income year shall be included in his assessable or (as the case may require) his non-assessable income for that year, and he shall be assessable and liable for income tax accordingly. (3) The following provisions shall apply with respect to every assessment made under this section in respect of income derived by any shareholder during any income year:— (a) No portion of any loss incurred by any taxpayer (being a loss of the kind referred to in section one hundred and fourteen hereof) shall be deducted from o£ set off against his proprietary income: (b) Notwithstanding anything to the contrary in section eighty-five hereof, all deductions from the assessable income by way of special exemption shall, to the extent of the portion of the assessable income that is not proprietary income, be made from that portion, and the balance (if any) shall be deducted from the assessable proprietary income: ■ (c) Where the proprietary income of the shareholder or any portion thereof is taxable under this section and that income is also taxable in the same year of assessment as being income

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derived by a proprietary company, there shall be deducted from the tax payable by the shareholder (so far as that tax exceeds the tax that would be payable by him if this section had not been passed) a sum equal to the income tax payable by the company in respect of that income. (4) The assessment of any shareholder of a proprietary company in accordance with the foregoing provisions of this section shall not affect the assessment or liability for tax of that proprietary company. (5) Nothing in the foregoing provisions of this section shall be construed to affect the assessment or liability of any shareholder for social security contribution. (6) Section eighty-six hereof shall not apply with respect to any dividend or interest (being interest of the kind referred to in section one hundred and forty-seven hereof) derived by a shareholder from any proprietary company where the Commissioner is satisfied that the dividend or interest was paid out of income derived by the company in the income year ended on the thirtyfirst day of March, nineteen hundred and thirty-nine, or in any income year in which the shareholder derived proprietary income from the company. (7) With respect to the proprietary income derived by a trustee from a proprietary company during any income year, the following provisions shall apply:— (a) The whole or any part of the proprietary income may for the purposes of this section be allocated by the Commissioner to such one or more of the beneficiaries under the trust, and if to more than one in such proportions, as the Commissioner determines. The Commissioner shall make the allocation in such manner as he deems just and equitable, having regard to the respective interests of the beneficiaries under the trust: (b) If and so far as the proprietary income of the trustee is so allocated to any beneficiary, it shall be deemed for the purposes of this section and of section one hundred and sixtyone hereof to be also proprietary income derived bv the beneficiarv as a beneficiary

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entitled in possession to the receipt thereof under the trust during the same income year, and for the purposes of this section the beneficiary shall be deemed to be a shareholder of the proprietary company accordingly: (e) If and so far as the proprietary income of the trustee is not allocated by the Commissioner to any beneficiary, it shall for the purposes of this section and of section one hundred and sixty-one hereof be deemed not to be also proprietary income derived by any beneficiary as aforesaid.

151. (1) For the purposes of this section, — " Proprietary company " has the same meaning as in the last preceding section: '' Relative '' means a husband or wife, or a relation by blood, marriage, or adoption. (2) Where any sum paid or credited by a proprietary company, being or purporting to be remuneration for services rendered by any person who is a shareholder or director of the company or a relative of any such shareholder or director, exceeds such amount as in the opinion of the Commissioner is reasonable, the amount of the excess shall not be an allowable deduction in computing the assessable income of the company, and shall, for the purposes of this Act, be deemed to be a dividend paid by the company to that person and received by him as a shareholder of the company.

Excessive remuneration by proprietary company to shareholder, director, or relative. 1939, No. 34, s. 24

152. (1) Where the Minister of Finance is satisfied that any proprietary company within the meaning of section one hundred and fifty hereof has been incorporated (whether before or after the passing of this Act) exclusively for the purpose of establishing in New Zealand a new industry and that the establishment of that industry is in the interests of New Zealand, the Minister may in his discretion declare that the company shall in respect of every income year during a period to be specified in that behalf in the declaration be deemed not to be a proprietary company within the meaning of the said section. (2) The period to be specified in any declaration under this section shall commence on the date of the incorporation of the company and shall not exceed six years. The period so specified may from time to time

Temporary relief for proprietary companies establishing new industries. 1940, No. 26, s. 2

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be extended by the Minister by a subsequent declaration to any date not later than ten years from the date of incorporation. (3) Every declaration under this section shall have effect according to its tenor. (4) Any declaration under this section may be made upon or subject to such conditions as the Minister of Finance thinks fit, and may be at any time revoked by the Minister if the company fails to comply with any such conditions.

Country of Derivation of Income 153. (1) Subject to the provisions of this Act, all income derived by any person who is resident in New Zealand at the time when he derives that income shall be assessable for income-tax, whether it is derived from New Zealand or from elsewhere. (2) Subject to the provisions of this Act, all income derived from New Zealand shall be assessable for income tax, whether the person deriving that income is resident in New Zealand or elsewhere. (3) Subject to the provisions of this Act, no income which is neither derived from New Zealand nor derived by a person then resident in New Zealand shall be assessable for income tax.

Liability for assessment of income derived from New Zealand and abroad. 1923, No. 21, s. 84

154. (1) A person other than a company shall be deemed to be resident in New Zealand within the meaning of this Part of this Act if his home is in New Zealand. (2) A company shall be deemed to be resident in New Zealand within the meaning of this Part of this Act if it — ! (a) Is incorporated in New Zealand; or (b) Has its head office in New Zealand. (3) The head office of a company means the centre of its administrative management,

Place of residence, how determined. 1923, No. 21, ' s.S6

Classes of income deemed to be derived from New Zealand. 1923, No. 21, s. 87 1935, No. 32, s. 9 1947, No. 59, s. 5

155. Subject to the provisions of the next succeeding section, the following classes of income shall be deemed to be derived from New Zealand (a) Income derived from any business carried on in New Zealand: (b) All salaries, wages, allowances, and emoluments of any kind earned in New Zealand in the service of any employer or principal, whether resident in New Zealand or elsewhere:

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(c) Income derived by any person as the owner of land in New Zealand: {d) Income derived by any person from any mortgage of land in New Zealand: (e) Income derived from shares in or membership of a New Zealand company, or from debentures issued by a New Zealand company or by a local or public authority: (/) Income derived from debentures or other securities issued by the Government of New Zealand, or from any contract made with that Government: (g) Any pension or annuity payable by the Government of New Zealand, or out of any superannuation fund established in New Zealand: {h) Income derived from money invested in the Common Fund of the Public Trust Office or the Maori Trust Office: (i) Income derived from the sale or other disposition of any property, corporeal or incorporeal, situated in New Zealand: (j) Income derived from money lent in New Zealand: (&) Income derived by a beneficiary under any trust, so far as the income of the trust fund is derived from New Zealand: (I) Income derived from contracts made or wholly or partly performed in New Zealand: (m) Income derived from the carriage by sea or by air of merchandise, mails, or passengers shipped or embarked in New Zealand: (n) Income derived directly or indirectly from any other source in New Zealand.

156. (1) In this section the term " commission agent " means any person who carries on in New Zealand by himself or by any person on his behalf the business of making commission agency contracts in New Zealand or of procuring such contracts to be made with him elsewhere. (2) In this section the term " commission agency contract " means a contract by which any person is authorized to sell out of New Zealand any goods or merchandise on commission or otherwise on behalf of any person resident or carrying on business in New Zealand.

Commission agency contracts performed out of New Zealand. 1923, No. 21, s. 104

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(3) The income derived by any commission agent in the performance out of New Zealand of commission agency contracts so made or procured in New Zealand shall, subject to any apportionment which may be made under this Act in respect of its source out of New Zealand, be .deemed to be derived by him from the business so carried on in New Zealand, and income tax shall be payable thereon accordingly.

157. Whenever by reason of the manufacture, production, or purchase of goods in one country and their sale in another, or by reason of successive steps of production or manufacture in different countries, or by reason of the making of contracts in one country and their performance in another, or for any other reason whatever, the source of any income is not exclusively in New Zealand, that income shall be apportioned between its source in New Zealand and its source elsewhere, or attributed to one of such sources to the exclusion of the other, in such manner as may be prescribed by regulations made under this Act; and in default of such regulations, or so far as they do not extend, then in such manner as the Commissioner thinks just and reasonable, having regard to the nature and relative importance of the sources of that income; and the income, so far as so apportioned or attributed to a source in New Zealand, shall be deemed to be derived from New Zealand, and shall be assessable for income tax accordingly.

Apportionment where income derived partly in New Zealand and partly elsewhere. 3923, No. 21, s. 88

158. (1) Income derived by a person resident in New Zealand but not derived from New Zealand shall be exempt from income tax if and so far as the Commissioner is satisfied that it is derived from some other country within the British dominions and that it is chargeable with income tax in that country. (2) In determining the country from which income is derived the Commissioner shall apply the same rules, with the necessary modifications, as are applicable in determining whether income is derived from New Zealand. (3) In this section " income tax " means, in respect of any country other than New Zealand, any tax which in the opinion of the Commissioner is substantially of the same nature as income tax under this Act. (4) This section shall have the same operation in relation to income derived from Western Samoa as it would have had if Western Samoa were part of the British dominions.

Exemption of income chargeable with tax in other British dominion. 1923. No. 21, s.S9 1950, No. 87, s. 12

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159. (1) The Governor-General may by Order in Council exempt in whole or in part from their liability to pay income tax in New Zealand as non-resident traders any persons being residents or nationals of a country specified in the Order (whether a country within His Majesty's dominions or elsewhere) if he is satisfied that residents of New Zealand who are carrying on business as non-resident traders in that country are exempt therein (whether by agreement with the Government of that country or otherwise) from income tax on profits derived from their business as non-resident traders. (2) Any Order in Council under this section shall, whether so expressed therein or not, extend to exempt from income tax in New Zealand (in their capacity as agents, but not otherwise) the agents of any non-resident traders to whom the Order in Council applies. (3) Every Order in Council under this section shall have effect according to its tenor, anything to the contrary in this Act notwithstanding. (4) Any Order in Council under this section may be at any time in like manner varied or revoked.

Beciproeal a rr angements for exemption of non-resident traders. 1935, No. 32, s. 11

160. (1) The Governor-General may from time to time, by Order in Council, declare that arrangements specified in the Order, being arrangements that have been made with the Government of any territory outside New Zealand with a view to affording relief from double taxation in relation to income tax and social security charge, or either of those taxes, and any taxes of a similar character imposed by the laws of that territory, shall, notwithstanding anything to the contrary in this Act or any other enactment, have effect in relation to income tax and social security charge, or either of those taxes, as the case may be; and every such Order in Council shall, subject to the provisions of this section, have effect according to its tenor. (2) Without limiting the generality of the foregoingprovisions, it is hereby declared that any arrangements to which effect is given under this section may contain provision, in relation to any of those taxes, — («) For relief from tax : (b) For charging the income derived from any sources in New Zealand to persons not resident in New Zealand:

Arrangements for relief from double taxation of income. 1946, No. 38, s. 5 1947, No. 6, s. .14

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(c) For determining the income to be attributed to persons not resident in New Zealand and their agencies, branches, or establishments in New Zealand: (d) For determining the income to be attributed to persons resident in New Zealand who have special relationships Avith persons not so resident. (3) Any such arrangements may include provision for relief from tax for periods before the passing of this Act or before the making of the arrangements, and provisions as to income which is not itself subject to double taxation. (4) Any Order in Council under this section may be at any time amended or revoked by a subsequent Order in Council; and any such amending or revoking Order in Council may contain such transitional provisions as appear to the Governor-General to be necessary or expedient. (5) Where any arrangements have effect under this section, the obligation as to secrecy imposed by any enactment, and in particular by section eleven hereof, shall not prevent the Commissioner or any authorized officer of the Land and Income Tax Department from disclosing to any authorized officer of the Government with which the arrangements are made such information as is required to be disclosed under the arrangements. (6) Without limiting the power to make regulations conferred on the Governor-General by section two hundred and forty-five hereof, it is hereby declared that all such regulations may be made under that section as are desirable or necessary for the purpose of carrying out the provisions of this section or any arrangements having effect thereunder.

Income Derived by a Trustee 161. With respect to income derived by a trustee the following provisions shall apply:— (a) If and so far as the income of the trustee is also income derived by a beneficiary entitled in possession to the receipt thereof under the trust during the same income year, the trustee shall in respect thereof be deemed to be the

Special provisions with respect to trustees. 1923, No. 21, s. 102 1939, No. 34, s. 27 1941, No. 18, s. 7 1945, No. 37, s. 9

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agent of that beneficiary, and shall be assessable and liable for income tax thereon accordingly, and all the provisions of this Act as to agents shall, so far as applicable, apply accordingly. Where any income is derived by a beneficiary as aforesaid subject to a condition, obligation, or trust requiring him to maintain or support any other person (whether out of the income so derived or otherwise) and that beneficiary would, apart from that condition, obligation, or trust, be entitled to a special exemption in respect of the maintenance and support provided by him for that other person, that beneficiary shall be assessed for income tax and shall be entitled to the same special exemptions as if he were beneficially entitled to the income free from any such condition, obligation, or trust: (b) If and so far as the income of the trustee is not also income derived by any beneficiary as aforesaid, the trustee shall be assessable and liable for income tax on that income in the same manner as if he was beneficially entitled thereto, save that the rate of tax shall be computed by reference to that income alone, and that the trustee shall not be entitled to any deduction by way of special exemption, and that no tax shall be payable if the income does not exceed fifty pounds, and that the amount of tax payable in any case shall, where necessary, be reduced so as not to exceed the amount by which the income exceeds fifty pounds: Provided that in any case where a trustee is required or is empowered at his discretion to pay or apply income derived by him to or for the benefit of specified beneficiaries or to or for the benefit of some one or more of a number of specified beneficiaries or of a specified class of beneficiaries, a beneficiary in whose favour the trustee so pays or applies income shall be deemed to be entitled in possession to the receipt of the amount paid to him or applied for his benefit during thincome year by the trustee under the trust:

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Provided also that where the income of the trustee is also income derived by any beneficiary who is an infant but whose interest in that income is vested, the beneficiary shall for the purposes of this section be deemed to be entitled in possession to the receipt of that income under the trust .during the same income year: (c) The trustee shall in every case make a return of the whole income so derived by him as trustee, and each such return shall be separate and distinct from any return of income derived by him under any other trust or in his own right: (d) Nothing in this section shall be so construed as to exempt a beneficiary from any income tax which would be payable by him had he derived the income to which he is entitled under the trust directly instead of through a trustee: (e) Where any company or corporation is a trustee any income assessable to the trustee under paragraph (b) of this section shall be assessable at the rate applicable to a trustee other than a company or a corporation.

162. It is hereby declared that any amount received in any income year by the trustee of the estate of a deceased person shall be deemed to be assessable or (as the case may require) non-assessable income derived by the trustee in that year if it does not represent assessable or non-assessable income derived by the deceased person during his lifetime, but would have been included in his assessable or non-assessable income if he had been alive when it was received.

Income received by trustee after death of deceased person. 1939, No. 34, s. 28

163. (1) For the purposes of this section the term " Maori authority " means the Board of Maori Affairs, the Maori Trustee, the East Coast Commissioner, a Maori Land Board, or a body corporate under Part XVII of the Maori Land Act, 1931; and includes any other body, authority, or person administering or having control of Maori land or reserves or any other property or income in trust for or on behalf of or for the benefit of any Maoris. (2) Where in any income year a Maori authority derives income (whether as trustee, agent, or otherwise) in trust for or on behalf of or for the benefit of any Maori

Income derived in trust for Maoris. 1939, No. 34, s. 29 1947, No. 59, Pt.l

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or Maoris, that income shall, for the purpose of assessing income tax thereon, be deemed to be income derived by the Maori authority as trustee for the Maori or Maoris, and the Maori authority shall be assessable and liable for income tax accordingly; and notwithstanding anything to the contrary in section five hundred and fifty of the Maori Land Act, 1931, or in any other enactment, the Maori authority may pay the tax out of any income derived by it in trust for or on behalf of or for the benefit of the Maori or Maoris. (3) Where in any income year a Maori authority, pursuant to any order or direction of the Maori Land Court or of any Maori Land Board, or pursuant to any settlement or trust created by any Act, or otherwise howsoever receives or retains any income to the receipt of which any Maori or Maoris would otherwise be entitled, or holds or deals with any such income on behalf of or for the benefit of any such Maori or Maoris, that income shall be deemed to be income derived by the Maori or Maoris during that income year, and the Maori authority shall in respect thereof be deemed to be the agent of the Maori or Maoris, and shall be assessable and liable for income tax in accordance with the provisions of paragraph {a) of section one hundred and sixty-one hereof.

164. (1) For the purposes of this section, — " Beneficial owners ", in relation to any land, means the persons who are beneficially entitled (whether in severalty or as tenants in common) to an estate in fee simple in that land, whether legal or equitable: " Maori authority " has the same meaning as in the last preceding section: " Tax " means income tax, and includes social security charge: Income shall be deemed to be distributed to a beneficial owner when it is paid to the beneficial owner or applied for his benefit or for any purpose authorized by him. (2) Notwithstanding anything to the contrary in the last preceding section or in any other Act, any income derived by a Maori authority (whether as trustee or agent or otherwise) from any land that is being developed or improved by the Maori authority under Part I of

Income derived from Maori land being developed under Part I of Maori Land Amendment Act, 1936. 1946, No. 38, s. 4

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the Maori Land Amendment Act, 1936 (not being land that is occupied by any person as a lessee, or as an occupier nominated under the said Part I), shall be deemed to be assessable income derived by the beneficial owners of that land in the income year in which that income is distributed to the beneficial owners, and the Maori authority shall be assessable and liable for income tax accordingly as agent for the respective beneficial owners in respect of the income so distributed in any income year, and all the provisions of this Act as to agents shall apply accordingly. (3) Notwithstanding anything to the contrary in section five hundred and fifty of the Maori Land Act, 1931, or in any other enactment, a Maori authority may pay the income tax payable in respect of any income distributed by the Maori authority to a beneficial owner, and may deduct and retain out of any income available for distribution to a beneficial owner such amount or amounts as may be necessary to pay any income tax that may be or become payable in respect of the income distributed or to be distributed to that beneficial owner.

1936, No. 53

1931, No. 31

PART VII Agents and Non -residents Interpretation 165. In this Part of this Act the term " absentee ' y means — (a) Any person (other than a company) who is for the time being out of New Zealand: (b) Any foreign company unless it has a fixed and permanent place of business in New Zealand at which it carries on business in its own name: (c) Any foreign company which is declared by the Commissioner to be an absentee for the purposes of this Act by notice given to that company or to its agent or attorney in New Zealand, so long as that declaration remains unrevoked.

" Absentee " defined. 1923, No. 21, s. 11l

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Agents Generally 166. Except where otherwise expressly provided by this Act, the rate of tax for which an agent shall be so assessed and liable shall be determined by reference to the total taxable land or income of the principal, but it shall be charged and payable only on the land or income in respect of which the agency exists, and in the same proportion which that land or income bears to the total taxable land or income of the principal.

Bate and amount of tax payable by agent. 1923, No. 21, s. 128

j: jl 167. (1) Nothing in this Act relating to an agent shall be so construed as to release the principal from liability to make returns and to be assessed and chargeable with tax. (2) No assessment of the agent shall preclude an assessment of the principal for the same tax, nor shall an assessment of the principal preclude an assessment of the agent for the same tax, and the principal and agent shall be jointly and severally liable for all tax for which the agent is liable. (3) When two or more persons are liable to be assessed as agents in respect of the same tax, they shall be jointly and severally liable therefor.

Liability of principal not affected. 1923, No. 21, s. 129

168. When an agent pays any tax he may recover the amount so paid from his principal, or may deduct the amount from any moneys in his hands belonging or payable to his principal.

Agent may recover tax from principal. 1923, No 21, s. 130

169. An agent may from time to time during the year preceding the year of assessment, or at any later time, retain out of any moneys belonging or payable to his principal such sums as may reasonably be deemed sufficient to pay the tax for which the agent is or may become liable.

Agent may retain from moneys of principal amount required for tax. 1923, No. 21, s. 131

170. An assessment made by the Commissioner shall, as between an agent and his principal, be a sufficient authority for the payment by the agent of the tax so assessed, and the agent shall be entitled as against Ms principal to reimbursement accordingly.

Assessment deemed authority for payment of tax by agent. .1923, No. 21, s. 132

171. (1) Every agent shall be personally liable for the tax on the land or income in respect of which he is j an agent. } (2) When the Commissioner is satisfied that an i agent has no moneys of his principal with which he can - pay the tax, and that he has not paid away any such

Agents to be personally liable for payment of tax. 1923, No. 21, s. 126

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moneys after notice of the assessment of the tax, and that immediate enforcement of payment by the agent would be a cause of hardship, the Commissioner may allow the agent such further period for the payment thereof, not exceeding six months after the date of the notice of assessment, as the Commissioner thinks necessary, and the additional tax imposed by section two hundred of this Act on taxpayers in default shall not accrue until the expirv of the period so allowed.

172. Every agent shall make returns of the land and income in respect of which he is an agent, and shall be assessed thereon in the same manner as if he was the principal, save that he shall be entitled to no special exemption other than such exemption (if any) as his principal may be entitled to.

Agent to make returns and be assessed as principal. 1923, No. 21, s. 127

173. When the Commissioner is satisfied that any person carrying on business in New Zealand (herein called the agent) is so far under the control of any other person carrying on business in New Zealand or elsewhere (herein called the principal) that the relation between them is in effect that of agent and principal, he may treat the first mentioned business as that of the principal, and as being carried on by the agent on his behalf, and may require returns to be made, and may make assessments accordingly, and the principal and agent shall be liable for income tax accordingly.

Eelation of principal and agent arising in effect. 1923, No. 21, s. 105

Special Cases of Agency 174. For the purposes of this Act, a mortgagee in possession of any land or other property shall be deemed to be the agent of the mortgagor in respect of any income derived by that mortgagee from that land or other property on behalf of or for the benefit of the mortgagor, and the mortgagee shall make returns and be assessable and liable for tax on that income accordingly, and all the provisions of this Act as to agents shall, as far as they are applicable, apply accordingly.

Liability of mortgagee in possession. 1950, No. 87, s. 15

175. Every person who, as guardian, committee, or otherwise, has the receipt, control, or disposition of any income derived by a person under any legal disability shall for the purposes of this Act be the agent of that person in respect of that income, and shall make returns and be assessable and liable for income tax accordingly.

Guardian of person under disability to be Ms agent. 1923, No. 21, s. 124

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176. Every person who on the thirty-first day of March in any year has the control or management of any land, or the receipt, control, or disposal of the rents or profits thereof, on behalf of an owner of that land who is an absentee or is under any legal disability, shall for the purposes of this Act be the agent of the owner in respect of land tax payable in and for the next succeeding year, and shall make returns and be assessable and liable for that tax accordingly.

Person having control of land or of rents and profits to be agent of absentee or person under disability. 1923, No. 21, s. 125

IIUUIV JL VTJL UAIWIV - 177. (1) Save as otherwise provided in section one hundred and forty-seven hereof, every company which has issued debentures, whether charged on the property of the company or not, shall for the purposes of this Act be the agent of all debentureholders, whether absentees or not, in respect of all income derived by them from those debentures, and shall make returns and be assessable and liable for income tax on that income accordingly. (2) No deduction by way of special exemption or otherwise shall be allowed to the company as such agent, or to any debentureholders, in respect of the income so derived from debentures. (3) Income so derived by debentureholders in companies shall be assessable and chargeable with income tax separately from income derived by the debentureholders from other sources, and at the rate prescribed by the annual taxing Act as appropriate to income so derived.

Companydeemed agent of debentureholders. 1923, No. 21, s. 116

178. (1) The duty to act as the agents of debentureholders imposed on companies by the last preceding section shall not apply with respect to debentures issued to any person resident in New Zealand if the company that has issued such debentures has supplied to the Commissioner, before it has been assessed in any year for income tax in respect of the income derived from those debentures, a certified list specifying the numbers of the debentures or other particulars sufficient to identify them, the names, addresses, and descriptions of the persons to whom the debentures have been issued, the interest derived or derivable therefrom, and such other particulars as may be prescribed. (2) Where any such list is supplied the person named therein as the holder of any debentures shall be personally responsible for the making of returns, and shall be

Modification of agency provisions in respect of income from companydebentures. 1927, No. 12, s. 3

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assessable and liable for income tax (though not to the exclusion of any other person) in respect of the income derived from those debentures at the rate fixed in respect thereof, unless and until he satisfies the Commissioner, before he has been assessed for income tax in any year, that he has transferred or assigned the debentures, and has given notice to the Commissioner in the prescribed form of the name, address, and description of the transferee or assignee. (3) Every person being the transferee or assignee of any debentures shall in like manner remain personally liable in respect thereof (though not to the exclusion of any other person) unless and until he has given notice to the Commissioner in the prescribed form of the transfer or assignment of the same. (4) Any tax paid by the former holder of any debentures in respect of the income derived therefrom by a subsequent holder shall be deemed to be paid on behalf of that subsequent holder so far as it does not exceed the tax to which the subsequent holder might himself have been liable in respect of such debentures, and may be recovered by the former holder from such subsequent holder accordingly.

179. (1) Save as provided in the next succeeding section, every local or public authority which has issued debentures shall for the purposes of this Act be the agent of all debentureholders, whether absentees or not, in respect of all income derived by them from those debentures, and shall make returns and be assessable and liable for income tax on that income accordingly. (2) No deduction by way of special exemption or otherwise shall be allowed to any local or public authority as such agent, or to any debentureholders, in respect of the income so derived from debentures. (3) Income so derived by the holders of debentures issued by a local or public authority shall be assessable and chargeable with income tax separately from income derive.d by the debentureholders from other sources, and at the rate prescribed by the annual taxing Act as appropriate to income so derived. (4) Nothing* in this section shall be so construed as to render liable to income tax any income that is exempt from taxation by virtue of section ninety-seven hereof.

Local and public authorities to be agents of debentureholders. 1923, No. 21, s. 118

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180. (1) The duty to act as the agents of debentureholders, imposed on local and public authorities by the last preceding section, shall not apply with respect to any debentures issued by any such local or public authority which has supplied to the Commissioner, before it has been assessed in any year for income tax in respect of the income derived from such debentures, a certified list specifying the numbers of the debentures or other particulars sufficient to identify them, the names, addresses, and descriptions of the persons to whom the debentures have been issued, and such other particulars as may be prescribed. (2) Where any such list is supplied the person named therein as the holder of any debentures shall be personally responsible for the making of returns, and shall be assessable and liable for income tax (though not to the exclusion of any other person) in respect of the income derived from those debentures at the rate fixed in respect thereof, unless and until he satisfies the Commissioner, before he has been assessed for income tax in any year, that he has transferred or assigned the debentures, and has given notice to the Commissioner in the prescribed form of the name, address, and description of the transferee or assignee. (3) Every person being the transferee or assignee of any debentures shall in like manner remain personally liable in respect thereof (though not to the exclusion of any other person), unless and until he has given notice to the Commissioner in the prescribed form of the transfer or assignment of the same. (4) Any tax paid by the former holder of any debentures in respect of the income derived therefrom by a subsequent holder shall be deemed to be paid on behalf of that subsequent holder so far as it does not exceed the tax to which the subsequent holder might himself have been liable in respect of such debentures, and may be recovered by the former holder from such subsequent holder accordingly.

Modification of agency provisions in respect of income from local or public authorities' debentures. 1923, No. 21, s. 119

181. (1) This section applies with respect to any ] income tax that may heretofore have become payable or i that may hereafter become payable in respect of income ] received by or on behalf of any person as alimony or { maintenance, pursuant to the order of any Court or 1 pursuant to any deed or agreement (whether such order, j

Recovery of income tax payable in respect of alimony or maintenance. 1936, No. 34, s. 15

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deed, or agreement has been made or entered into before the commencement of this Act or is made or entered into after the commencement of this Act). (2) In any case to which this section applies, the person bound by any such order, deed, or agreement to pay any moneys as alimony or as maintenance as aforesaid, shall for the purpose of the payment of the income tax thereon, be deemed to be the agent of the person to whom or on whose behalf such moneys have been paid or are payable, and all the provisions of this Act as to the liability of agents shall apply with respect to him accordingly. (3) It shall be no defence in any proceedings against an agent for the recovery of any income tax to which this section relates that any amount in respect of income tax has been paid by him to the person entitled to receive any moneys as alimony or maintenance.

Agents of Absentees and Non-Residents 182. Every person who in New Zealand carries on any business for and on behalf of a principal who is an absentee shall for the purposes of this Act be the agent of that principal in respect of all income derived by the principal through the business so carried on in New Zealand by means of that agent, and the agent shall make returns and be assessable and liable for income tax on that income accordingly, whether the income comes to the hands of the agent or not.

Liability of agent of absentee principal for returns and tax. 1923, No. 21, s. 112

183. Every person who in New Zealand carries on business in partnership with an absentee shall for the purposes of this Act be the agent of that absentee in respect of his share of the income of the business, and shall make returns and be assessable and liable for income tax accordingly.

Partner of absentee deemed agent. 1923, No. 21, s. 114

Master of ship deemed agent of absentee owner. 1923, No. 21, s. 115

184. (1) When an absentee, by means of any ship owned by him or under charter to him, carries on the business of the carriage of merchandise, mails, or passengers, the master of that ship shall (though not to the exclusion of any other agent) be the agent of that absentee for the purposes of this Act in respect of all assessable income so derived by the absentee, and shall be assessable and liable for income tax accordingly. (2) Pending the payment of any tax assessed against such an absentee or against any person who is his agent

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for the purposes of this Act, a Collector of Customs shall, on the requisition of the Commissioner, withhold the clearance of the ship in respect of which the tax is payable.

185. (1) Any tenant, mortgagor, or other person who transmits from New Zealand to any landlord, mortgagee, or other creditor, being an absentee, any rent, interest, or other moneys being income derived by that absentee from New Zealand, shall for the purposes of this Act be the agent of that absentee in respect of all moneys so transmitted by him at any time after the Commissioner has given notice to him that he is accountable as the agent of that absentee, and he shall in respect of all such moneys make returns and be assessable and liable for income tax accordingly. (2) For the purposes of this section any moneys paid by or on account of a person resident in New Zealand from a fund situated out of New Zealand shall be deemed to be moneys transmitted by that person from New Zealand.

Tenant, mortgagor, or other debtor, to be agent of absentee landlord, mortgagee, or other creditor. 1923, No. 21, s. 123 1935, No. 32, s. 10

186. Every person who on the thirty-first day of March in any year has the control or management of any land, or the receipt, control, or disposal of the rents or profits thereof, on behalf of an owner of that land who is an absentee shall for the purposes of this Act be the agent of the owner in respect of land tax payable in and for the next succeeding year, and shall make returns and be assessable and liable for that tax accordingly. - i • _ AT J To tN r\

Person having control of land or of rents and profits to be agent of absentee owner. 1923, No. 21, s. 125

Person having disposal of income deemed agent. 1923, No. 21, s. 113

187. Every person who m New Zealand nas tne receipt, control, or disposal of any income derived by a principal who is an absentee shall for the purposes of this Act be the agent of the principal in respect of that income, and shall make returns and be assessable and liable for income tax on that income accordingly. _ 1 • T __ J_ _£?

[ Company to be agent of absentee , shareholders. 1923, No. 21, ! s. 120 >

188. A New Zealand company which is exempt irom income' tax shall be the agent of all shareholders or members who are absentees, and the company shall make returns and be assessable accordingly on all dividends and other profits paid or credited by the company to such shareholders or members at any time while they are absentees.

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Bankingcompany to be agent of absentee depositors. 1923, No. 21, s. 121

189. Every banking company, and every other company, local or public authority, or other person, who in the course of business receives or holds money by way of deposit and allows interest thereon shall for the purposes of this Act be the agent of all depositors who are absentees, and shall make returns and be assessable and liable for income tax accordingly on any interest which is paid or credited to a depositor while he is an absentee, if that interest exceeds fifty pounds in any year.

Premiums on insurance effected with persons not carrying on business in New Zealand. 1923, No. 21, s. 106

190. (1) Where any person in New Zealand enters into a contract of insurance or guarantee against loss, damage, or risk of any kind whatever (not being a contract of life insurance) with any person or foreign company not carrying on business in New Zealand, such last mentioned person or such company shall be liable to income tax at a rate of five per cent of the amount of premium paid or payable by such first mentioned person in respect of such contract. (2) Where the amount of premium paid or payable in respect of any such contract is not disclosed, the amount shall be deemed to be the same amount as would be chargeable in respect of a similar contract of insurance or guarantee effected with a companv carrving on business in New Zealand. (3) Every person who enters into a contract of insurance or guarantee as aforesaid shall for the purposes of this Act be deemed to be the agent of the person or foreign company with whom such contract is made, and shall make returns and be assessable and liable for income tax accordingly. (4) Every person who exports any goods from New Zealand shall, on making entry therefor under the Customs Acts, state in the entry whether or not such goods are insured, and, if so, the name and description of the person or company with whom such goods are insured and the amount of the premium payable in respect thereof. (5) A copy of every such entry shall forthwith be transmitted to the Commissioner by the Collector of Customs.

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191. (1) The employer or the agent of the employer of every non-resident taxpayer shall, for the purposes of this Act, be the agent of such non-resident taxpayer in respect of the salary, wages, or other emoluments received by him, and shall make returns and be assessable and liable for income tax thereon accordingly.

Liability as agent of employer of non-resident taxpayer and employer's agent. 192(3, No. 24, s. 7

(2) Where any such non-resident taxpayer has, whether before or after the passing of this Act, made default in the payment of any income tax payable by him in respect of his salary, wages, or other emoluments as aforesaid, the amount of such tax shall, on application by the Commissioner, be deducted by the employer or his agent from any salary, wages, or other emoluments thereafter to be paid, and shall be paid to the Commissioner on behalf of the taxpayer. (3) Where any non-resident taxpayer is in receipt of any pension or annuity payable by the Government of New Zealand or payable out of any superannuation fund established in New Zealand, any income tax heretofore payable or that may hereafter become payable by such non-resident taxpayer in respect of such pension or annuity shall, on application by the Commissioner, be deducted from any instalment or instalments of such pension or annuity thereafter to be paid, and shall be paid to the Commissioner on behalf of the taxpayer. (4) For the purposes of this section the term " nonresident taxpayer " means any person who, being liable for income tax in respect of salary, wages, or other emoluments derived from New Zealand, or in respect of any annuity or pension derived from New Zealand, has no fixed and permanent residence or place of abode in New Zealand.

19,2. Every non-resident trader shall for the purposes of this Act be the agent of all persons in his employment in New Zealand in respect of the salary, wages, or other emoluments received by them, and shall make returns and be assessable and liable for income tax thereon accordingly. The agent in New Zealand of a non-resident trader shall, for the purposes of this section, be under the same obligations as his principal.

Non-resident trader to be agent of employees in New Zealand. 1923, No. 21, s. 122 1926, No. 24, s. 8

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Agents in New Zealand of principals resident or carrying on business abroad 1923, No. 21, s. 103

193. When any person in New Zealand, on behalf of a principal resident or carrying on business out of New Zealand, is instrumental in procuring the purchase from 1. that principal of goods or merchandise which are in New Zealand or are to be imported into New Zealand in pursuance or in consequence of such purchase, whether the contract of purchase is made in New Zealand or elsewhere, the principal shall in respect of the sale by him of such goods or merchandise be deemed to be carrying on business in New Zealand through the agency of that person; and the income derived from such business shall be deemed to be derived from New Zealand, in the same manner and to the same extent as if the contract had been made in New Zealand, and shall be assessable for income tax accordingly, and the agent shall make returns and pay tax accordingly.

194. (1) In respect of the sale or purchase of goods, a non-resident agent shall not act as agent, and a nonresident trader shall not carry on business, unless that agent or trader is the holder of a warrant in that behalf issued in the prescribed form by the Commissioner or by a Collector of Customs. (2) A warrant so issued may be at any time revoked by the Commissioner by notice given to the holder. (3) In every case in which a warrant is issued by a Collector of Customs he shall forthwith notify the Commissioner of the issue thereof. (4) In all proceedings against any person for a breach of this section it shall be for the defendant to prove that he is the holder of a warrant.

Non-resident agents or traders not to carry on business without warrant. 1923, No. 21, s. 109

Comissioner may require non-resident agent or trader to give security. 3923, No. 21, s. 110

195. (1) The Commissioner may at any time and from time to time require any non-resident trader or non-resident agent to give security by way of bond, deposit, or otherwise, to the satisfaction of the Commissioner, for the payment of any income tax which may become payable by him. (2) After security has been so demanded, and before it has been duly given, it shall not be lawful for the nonresident trader to carry on business or for the nonresident agent to act as an agent, except with the leave of the Commissioner.

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PART VIII Payment and Recovery of Tax 196. (1) Land tax and income tax shall, except where expressly made payable on demand by any provisions of this Act, be due and payable on such respective dates as are appointed in that behalf by the Grovernor-General in Council, and the Commissioner shall in each case give not less than fourteen days' public notice of the date so appointed. (2) Such notice shall be given by the publication thereof in the Gazette and in such other manner (if any) as the Commissioner thinks necessary and sufficient.

GovernorGeneral in Council to fix dates for payment of taxes. 1923, No. 21, s. 133

197. All moneys payable as income tax by any public authority shall be paid without further appropriation than this section.

Payment of income tax by public authorities. 1940, No. 3, 5.4(3)

198. (1) In the exercise of the powers conferred by section one hundred and ninety-six hereof, the GovernorGeneral in Council may, in respect of the payment of income tax for any year, appoint several dates on each of which an instalment of the income tax for that year shall become due and payable. Such dates may be appointed at any time notwithstanding that the annual taxing Act may not then have been passed, or that an assessment of the tax payable by any taxpayer may not then have been made. (2) Without limiting the general power to make regulations conferred by section two hundred and forty-five hereof, it is hereby declared that regulations may be made under that section for all or any of the following purposes:— (a) Providing for the fixing of the amounts of the instalments of income tax payable by any taxpayers or by any class of taxpayers for any year, whether by reference to the basic rates, or by reference to the amount of income tax payable for the last preceding year, or otherwise: (b) Prescribing the manner in which the payment of instalments of income tax or of any class of instalments shall be denoted or acknowledged:

Payment of income tax byinstalments. 1940, No. 3, s. 10

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(c) Providing for the allowance of interest or discount in respect of instalments of income tax or in respect of any class of instalments: (d) Making any provision which may be necessary or convenient in relation to the assessment, collection, and adjustment of instalments of income tax, or generally for the purposes of this section.

Allowance by ay of interest on ineome tax paid in advance. 1934, No. 31, s. 8 1944, No. 28, s. 7

199. (1) Subject to such terms and conditions as the Minister of Finance may prescribe any taxpayer may pay in advance any sum in respect of any income tax | that may become payable by him in any financial year (hereinafter in this section referred to as the said year), but no such payment shall be made earlier than the day following the day fixed as the due date of income tax in the immediately preceding financial year. Every person who makes any such payment shall, subject to the provisions of this section and to such conditions as may be prescribed, be entitled to interest or discount on the amount of such payment at such rate or rates as the Minister of Finance from time to time determines for every complete month in the period commencing on the date of payment and ending on such date in the said year as the Minister of Finance determines. (2) The sum of all such payments made by any taxpayer in respect of the said year, together with the interest or discount thereon, shall be applied in payment of the income tax payable by him in the said year, but if the tax is less than the sum of such payments and interest, the balance of such sum shall, on or after the due date of the tax, be refunded to the taxpayer without further appropriation than this section. The sum so applied shall be credited as income tax paid for the said year, and the amount representing interest or discount shall be charged to the Consolidated Fund, without further appropriation than this section, as interest paid to the taxpayer. (3) All interest or discount to which any taxpayer becomes entitled under this section on any payments made in respect of the said year shall be deemed to be assessable income derived by the taxpayer during the said year.

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200. (1) Subject to the provisions of this section, if any tax remains unpaid at the expiration of twenty-one days after the due date thereof (whether already assessed or not), or after the date of demand, as the case may be, five per cent on the amount of the tax unpaid shall be and be deemed to be added thereto by way of additional tax, and shall be payable accordingly. (2) In any case in which an assessment is not made until after the due date of the tax, or is increased after the due date of the tax, and the Commissioner is satisfied that the taxpayer has not been guilty of wilful neglect or default in making due and complete returns for the purposes of that tax, the Commissioner shall in his notice to the taxpayer of the assessment or amended assessment, or in any subsequent notice, fix a new date for the payment of the tax or of the increase, as the case may be, and the date so fixed shall be deemed to be the due date of that tax or increase for the purposes of the last preceding subsection. (3) Where the taxpayer is resident beyond New Zealand and has no agent in New Zealand, the Commissioner shall, before charging the additional tax as aforesaid, grant such further time, not exceeding six months after the due date of the tax, as he may deem necessary. (4) On application for relief made in writing by or on behalf of any taxpayer who (whether before or after the passing of this Act) has become liable for the payment of any additional tax pursuant to the foregoing provisions in that behalf of this section, the Commissioner, if having regard to the circumstances of the case he thinks it equitable so to do, may, subject to the provisions of this section, grant relief to the taxpayer—(a) By the remission of the whole or part of such additional tax; or (b) Where such additional tax has been paid in whole or in part, by the refund to the taxpayer of the whole or any part of such tax that has been paid, with or without the remission of any part of such additional tax that has not been paid. (5) No amount of tax for any year of assessment, whether before or after the passing of this Act, in excess of one hundred pounds shall be remitted or refunded under this section except with the approval of the Minister of Finance.

If default made in payment of tax, additional amount to be charged. 1923, No. 21, s. 135 193 7,N0. 36, s. 6 1950, No. 87, s. 16

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(6) Any refund of tax under this section may be made without further appropriation than this section.

201. All unpaid tax shall be recoverable by the Commissioner on behalf of the Crown by suit in his official name. Notwithstanding anything to the contrary in the Magistrates' Courts Act, 1947, any Court constituted under that Act shall have jurisdiction to hear and determine proceedings by the Commissioner for the recovery of tax, whatever the amount involved.

Mode of recovery of unpaid tax. 1923, No. 21, s. 136 1939, No. 34, s. 31 1947, No. 16

202. (1) Where any taxpayer has made default in the payment of any income tax payable by him for any year of assessment, the Commissioner may from time to time by notice in writing require any person to deduct from any amount payable or to become payable by that person to the taxpayer such sum as may be specified in the notice, and to pay every sum so deducted to the Commissioner to the credit of the taxpayer within such time as may be specified in the notice. (2) This section shall bind the Crown. (3) Where any notice under this section relates to any wages or salary, the sums required to be deducted therefrom shall be computed so as not to exceed a deduction at the rate of one twentieth per week of the income tax due an.d payable by the taxpayer at the date of the notice, or at the rate of twenty per cent of the wages or salary, whichever rate is the less. (4) Any notice under this section may be at any time revoked by the Commissioner by a subsequent notice to the person to whom the original notice was given (hereinafter referred to as the debtor), and shall be so revoked at the request of the taxpayer at any time when the Commissioner is satisfied that all income tax then due and payable by the taxpayer has been paid, and that the Commissioner holds to the credit of the taxpayer an amount not less than the amount of the income tax (if any) to become due and payable by him during the then current year of assessment. (5) A copy of every notice given under this section in respect of any taxpayer and of the revocation of any such notice shall be given to the taxpayer by the Commissioner.

Deduction of income tax from payment due to defaulters. 1942, No. 2, s. 7

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(6) Whenever pursuant to a notice under this section any deduction is made from any amount payable to any taxpayer the taxpayer shall be entitled to receive from the debtor a statement in writing of the fact of the deduction and of the purpose for which it was made. (7) The sum deducted from any amount pursuant to a notice under this section shall be deemed to be held in trust for the Crown, and, without prejudice to any other remedies against the debtor or any other person, shall be recoverable in the same manner in all respects as if it were income tax payable by the debtor. (8) Every person commits an offence and shall be liable on summary conviction to a fine not exceeding one hundred pounds Avho—(a) Fails to make any deduction required by a notice under this section to be made from any amount payable by him to a taxpayer: (It) Fails after making any such .deduction to pay the sum deducted to the Commissioner within the time specified in that behalf in the notice.

203. In any action in the Supreme Court for the recovery of tax from a defendant absent from New Zealand the Supreme Court may grant leave to serve the writ out of New Zealand, or to proceed without service in the same manner as may be provided in other cases by the Rules of the Supreme Court for the time being in force, save that no security shall be required from the Commissioner.

Procedure in Supreme Court where defendant absent from New Zealand. 1923, No. 21, s. 137

204. T n an action in a Magistrate's Court for the recovery of tax, if the defendant is absent from New Zealand or cannot after reasonable inquiry be found, service of the summons may with the leave of a Magistrate be effected by posting a duplicate or sealed copy thereof in a letter addressed to the defendant at his present or last known place of abode or business, whether in New Zealand or elsewhere.

Procedure in Magistrate's Court where defendant absent from New Zealand. 1923, No. 21, s. 138

205. In an action in a Magistrate's Court for the recovery of tax, if the summons is served on the defendant at least thirty days before the day appointed for hearing, then unless within the time limited by law for filing a notice of intention to defend an action in that Court notice of that intention is duly filed by or on behalf of the defendant, judgment shall be given for the amount claimed and costs without allowing any defence,

Notice of intention to defend in Magistrate's Court. 1923, No. 21, s. 139

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and without it being necesary for the Commissioner or any one on his behalf to appear in Court or to prove the liability of the defendant.

Particulars of claim or demand. 1923, No. 21, s. 140

206. In an action in any Court for the recovery of tax it shall be sufficient if the particulars of claim or demand state the amount sought to be recovered an.d the date on which the same became payable, and such further particulars (if any) as the Commissioner thinks necessary in order fully to inform the defendant of the nature of the claim.

Commissioner may appear in legal proceedings by officer of Public Service. 1923, No. 21, s. 141

207. In all proceedings in a Magistrate's Court on objection to an assessment of tax, and in any action in a Magistrate's Court for the recovery of tax, the Commissioner may, if he thinks fit, appear by some officer in the Public Service, and the statement of any person so appearing that he is such an officer and that he appears for the Commissioner shall be sufficient evidence of the facts so stated and of his authority in that behalf.

Costs against Commissioner. 1923, No. 21, s. 142

208. In all proceedings in any Court for the recovery of tax, costs may be awarded to or against the Commissioner in the same manner as in other cases, but all costs so awarded against the Commissioner shall be payable out of moneys appropriated by Parliament, and not otherwise.

Proceedings not affected by vacancy or change in office of Commissioner. 1923, No. 21, s. 143

209. No action instituted by the Commissioner for the recovery of tax, and no proceedings on objection to an assessment of tax, shall abate by reason of any vacancy in the office of Commissioner, or shall be deemed defectively constituted by reason of any change in the holder of that office, and every such action or proceeding shall be continued in the ordinary course as if the Commissioner and his successors in office were a corporation sole.

No limitation of action to recover tax. 1923, No. 21, s. 144

210. No statute of limitations shall bar or affect any action or remedy for the recovery of tax.

Crown Proceedings Act not affected. 1923, No. 21, s. 145

211. Nothing in this Act shall be so construed as to limit or affect the operation of the Crown Proceedings Act, 1950, and all rights and remedies conferred upon the Crown by that Act and by this Act shall coexist, and may be exercised independently of one another, and tax may be recovered accordingly.

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212. Whenever, after reasonable inquiry to the satisfaction of the Commissioner, the name of the owner of any land cannot be ascertained the following provisions shall apply:— (a) He shall be assessed for land tax under the designation of "the owner " of that land: (b) Proceedings for the recovery of such tax may be taken and judgment may be given against him and enforced under the designation aforesaid: (c) Good service of any notice, summons, or writ may be effected on him by affixing the same or a sealed copy or duplicate thereof on a conspicuous part of any land to which the tax relates, any Act or rule of Court to the contrary notwithstanding.

Provisions where name of owner of land not known. 1923, No. 21, s. 146

213. (1) When land tax has been assessed and has become due and payable in respect of any land, and the taxpayer has made default in payment thereof, the Commissioner may thereupon or at any time thereafter, so long as snch .default continues, by notice in writing, demand payment of the tax from any of the following persons, who shall thereupon become personally liable in the same manner as the taxpayer:— (a) Any person who is at the time of demand the owner at law or in equity of the estate or interest in respect of which the tax was assessed, as the successor in title of the taxpayer: (b) Any person who is at the time of demand a tenant of the land, holding under the taxpayer or his successor in title: (c) Any person who is at the time of demand a mortgagee of the estate or interest in respect of which the tax was assessed. (2) If the land so held by a successor in title or tenant, or so subject to a mortgage, is only part of the land in respect of which the tax was assessed, the tax shall for the purposes of this section be apportioned by the Commissioner in such manner as he deems just, and the liability of the successor in title, tenant, or mortgagee shall be determined accordingly.

Recovery of land tax from persons other than owner of land. 1923, No. 21, s. 147

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(3) All payments made under this section by any person on whom demand has been so made shall be deemed to be made on behalf of the taxpayer.

Unpaid land tax to constitute a charge on land. 1940, No. 3, s. 11

214. (1) Land tax which has been assessed and has become due and payable in respect of any land (whether before or after the passing of this Act) shall be a charge on the land in respect of which it is payable. (2) Subject to the provisions of this subsection, every charge created by this section shall have priority over all existing or subsequent mortgages, charges, or encumbrances, and the land on which any charge is created under this section shall continue to be subject to the charge, notwithstanding any disposition of the land. Notwithstanding anything to the contrary in any other Act, if any land subject to a charge created bv this section is also subject to a charge created by that other Act, the charges shall rank equally with each other unless by virtue of that Act the charge created thereby would be deferred to the charge created by this section. (3) The Commissioner may, at any time before any charge created by this section has been discharged or has lapsed as provided in subsection seven of this section, register the charge by depositing with the District Land Registrar or Registrar of Deeds, as the case may require, in the land registration district in which the land is situated a certificate under his hand referring to the land charged and stating that there are arrears of land tax payable in respect thereof, and the Registrar shall thereupon, without payment of any fee, register the certificate accordingly. No disposition of any estate or interest in any land shall be registered while a charge under this section is registered against the land. (4) For the purpose of enforcing any charge registered under this section the Supreme Court may make such order as it thinks fit, either for the sale of the estate or interest that is subject to the charge, or for the appointment of a Receiver, or otherwise howsoever, and any order for sale shall be carried into effect by the Sheriff in the same manner as in the case of a writ of sale, with any modifications that may be necessary or may be provided for by rules of Court in that behalf.

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(5) Every charge heretofore registered against any land under any enactment heretofore in force shall, until a release of the charge is registered, operate to secure all land tax secured thereby at the passing of this Act, together with all land tax from time to time payable by the taxpayer in respect of that land for any subsequent year of assessment, or so much thereof as from time to time remains unpaid. (6) Every charge hereafter registered against any land under this section shall, until a release of the charge is registered, operate to secure all land tax from time to time payable by the taxpayer in respect of that land for the year of assessment ended on the thirty-first day of March last preceding the registration of the charge or for any subsequent year of assessment, or so much thereof as from time to time remains unpaid. (7) Every charge created by this section on any land in respect of any land tax shall, if it has not been sooner discharged, lapse at the end of the year next following the year of assessment for which the tax is payable unless at that time the tax is secured by a charge previously registered against the land under this section: Provided that if, owing to the failure of the taxpayer to furnish a complete return of the land owned by him, a correct assessment of land tax is not made before the time specified in this subsection, that time shall be deemed to be extended to the end of the year next following the year in which a correct assessment of the tax is made. (8) Notwithstanding anything to the contrary in the last preceding section, no demand may be made by the Commissioner under that section in respect of any land tax at any time after the charge created by this section in respect of that tax has lapsed under the last preceding subsection. (9) Upon payment of all tax for the time being secured by any charge registered under this section the Commissioner shall cause a release of the charge to be registered. On the registration of any such release there shall be payable to the District Land Registrar or Registrar of Dee.ds, as the case may require, a registration fee of ten shillings, or, if the maximum amount of

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land tax secured by the charge at any one time was less than ten shillings, a registration fee equal to that maximum amount: Provided that, in special circumstances, and on the recommendation of the Commissioner, a release may be registered without payment of a registration fee. (10) The fees prescribed by this section shall be payable by the owner of the land charged or other person by whom the land tax secured by the charge was payable, and shall be paid in the first instance to the Commissioner. (11) Application for the registration of a release shall be made by the Commissioner in writing, and in the application the Commissioner shall certify that the registration fee has been paid, or, if the case so requires, shall recommend that the release be registered without payment of a registration fee.

Recovery of tax paid by one person on behalf of another. 1923, No. 21, s. 148

215. Every person who in pursuance of this Act pays an}' tax for or on behalf of any other person shall be entitled to recover the same from that other person as a debt, or to retain or deduct the same out of or from any money which is or becomes payable by him to that other person; and if he has paid the same as mortgagee, then, until repaid, it shall be deemed to form part of the moneys secured by the mortgage, and shall bear interest at the same rate accordingly.

Payment of income tax and social security eharge by persons leaving New Zealand. 1939, No. 3, s. 19

216. (1) Upon the application of any person about to leave New Zealand, if the Commissioner is satisfied—(a) That that person is not liable to pay any income tax or social security charge; or (b) That all income tax and social security charge payable by that person have been paid; or (c) That satisfactory arrangements have been or will be made for the payment of all income tax and social security charge that are or may become payable by that person,— the Commissioner may issue a certificate to the effect that that person is not under any liability for income tax or social security charge requiring to be discharged before he leaves New Zealand.

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(2) Every certificate under this section shall remain in force for such period or until such date as may be specified in that behalf in the certificate. (3) No ticket or other authority to travel from New Zealand by any ship or aircraft shall be issued to or in respect of any person by the owner or charterer, or by any representative or employee of the owner or charterer, of the ship or aircraft unless and until a certificate issued under this section in respect of that person and not expiring before the date of the departure of the ship or aircraft from New Zealand is presented to the owner or charterer or to his representative. (4) On the first working day after the departure of any ship or aircraft from any port or place at which it takes on board passengers for any destination beyond New Zealand, the owner or charterer of the ship or aircraft or the representative of the owner or charterer at that port or place, shall deliver or forward by post to the Commissioner all certificates so presented by persons travelling by the ship or aircraft, together with a list showing the name and last known address in New Zealand of every person who so travelled (not including, unless the Commissioner in any case otherwise requires, any member of the crew or staff of the ship or aircraft). (5) If any person travels from New Zealand by any ship or aircraft pursuant to a ticket or other authority issued at any port or place in contravention of this section, the owner or charterer of the ship or aircraft, and the representative (if any) of the owner or charterer at that port or place shall be personally liable jointly and severally to pay the amount of income tax and social security charge (if any) that is or may become due and payable by that person in respect of income derived in the income year in which he leaves New Zealand or in any earlier year. (6) Every person who acts in contravention of or fails to comply with the provisions of this section commits an offence against this Act.

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PART IX Penalties 217. Every person who—(a) Refuses or fails to furnish any return or information as and when required by this Act or the regulations made thereunder, or by the Commissioner; or (b) Wilfully or negligently makes any false return, or gives any false information, or misleads or attempts to mislead the Commissioner, in relation to any matter or thing affecting his own or any other person's liability to taxation; or (c) Refuses or fails without lawful justification to duly attend and give evidence when required by the Commissioner, or to truly and fully answer any question put to him, or to produce any book or paper required of him; or (d) Obstructs any officer acting in the discharge of his duties or in the exercise of his powers under this Act ; or (e) Commits any other offence against this Act or against any regulation made thereunder for which no other penalty is expressly provided; or (/) Aids, abets, or incites any other person to commit any offence against this Act or against any regulation made thereunder — is liable to a fine not exceeding one hundred pounds and not less than two pounds.

Penalty for failure to furnish returns, &c. 1923, No. 21, s. 149

Fines recoverable summarily. 1923, No. 21, s. 150

218. All fines under this Act shall be recoverable by way of summary prosecution, and only upon the information of the Commissioner or Deputy Commissioner, or of some person authorized in writing by the Commissioner in that behalf, and the signature of the Commissioner to any warrant of authority under this section shall be judicially noticed.

219. Notwithstanding anything in the Justices of the Peace Act, 1927, or in any other Act to the contrary any information in respect of any offence against this Act or against any regulation made thereunder may be laid at any time within ten years after the termination of the year in which the offence was committed.

Information may be laid within ten years. 1923, No. 21, s. 151 1927, No. 37 1947, No. 45, s. 10

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220. If any taxpayer evades, or attempts to evade, or does any act with intent to evade, or makes default in the performance of any .duty imposed upon him by this Act or the regulations thereunder with intent to evade, the assessment or payment of any sum which is or may become chargeable against him by way of tax (which sum is hereinafter referred to as the deficient tax), he shall be chargeable, by way of penalty for that offence, with additional tax (hereinafter called penal tax) equal to treble the amount of the deficient tax.

Penal tax in case of evasion 1923, No. 21, s. 152

221. Subject to the provisions of this Part of this Act, penal tax shall for all purposes be deemed to be tax of the same nature as the deficient tax, and shall be deemed to be payable in and for the same year of assessment as the deficient tax.

Nature of penal tax. 1923, No. 21, s. 153

222. The penal tax shall be assessed by the Commissioner in the same manner, so far as may be, as the deficient tax, but separately therefrom.

Assessment of penal tax. 1923, No. 21, s. 154

223. (1) Any such assessment of penal tax shall be subject, in the same manner as any other assessment of tax, to objection on the ground that the person so assessed is not chargeable with penal tax, or on the ground that the amount so assessed is excessive. (2) All the provisions of this Act as to objections shall apply to an objection to an assessment of penal tax, save that the burden of proving the offence in respect of which penal tax is chargeable shall lie upon the Commissioner.

Objections to penal tax. 1923, No. 21, s. 155

224. (1) An assessment of penal tax may be made and the tax so assessed shall be recoverable at any time whether before or after the passing of the annual taxing Act by which the rate of the deficient tax is determined, and whether before or after the deficient tax has been assessed, or become assessable or payable, or has been paid. (2) When an assessment of penal tax is made before the passing of the annual taxing Act by which the rate of the deficient tax is determined, the deficient tax shall for that purpose be estimated by reference to the rate determined by the last preceding annual taxing Act.

Recovery of penal tax. 1923, N0.21, s. 156

225. (1) Penal tax shall be assessable against and recoverable from the executors or administrators of a deceased taxpayer, but, if so assessed, the amount thereof shall be recoverable only as a debt incurred by the. deceased in his lifetime.

Recovery of penal tax from executors or administrators. 1923, No. 21, s. 157

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(2) No penal tax shall be recoverable from any person other than the taxpayer himself, or his executors or administrators.

226. An assessment of penal tax may be amended from time to time in the same manner as any other assessment.

Amendment of assessment of penal tax. 1923, No. 21, s. 158

227. No assessment of penal tax shall be made or increased at any time after the expiration of ten years after the year of assessment of the deficient tax.

Limitation of time for assessment of penal tax. 1923, No. 21, s. 159 1945, No. 37, s. 10

Recovery of penal tax not affected by conviction of taxpayer. 1923, No. 21, s. 160

228. The assessment or recovery of penal tax in respect of any offence shall not be in any manner barred or affected by the fact that the taxpayer has been convicted under this Act of the same or any other offence; but no person who has paid the penal tax assessed against him for any offence shall be thereafter convicted of the same offence.

229. (1) The Commissioner shall from time to time publish in the Gazette a list of persons who at any time after the passing of this Act,— (a) Have been convicted under par graph (b) of section two hundred and seventeen hereof of wilfully making any false return, or of giving any false information or misleading or attempting to mislead the Commissioner in relation to any matter or thing affecting their own or any other person's liability to taxation; or (b) Have been charged with penal tax under section two hundred and twenty hereof; or (e) Have been charged with penal charge under section one hundred and twenty-one of the Social Security Act, 1938, or under section twelve of the Finance Act (No. 2), 1946. (2) The Commissioner may, in his discretion, omit from any list published under this section any reference to any taxpayer to whom subsection one of this section applies if the Commissioner is satisfied that, before any investigation or inquiry has been commenced in respect of the offence or evasion of which the taxpayer is guilty, the taxpayer has voluntarily disclosed to the

Publication of names of tax evaders. 1945, No. 37, s. 19 3 No. 78, s. 15

1938, No. 7 1946, No. 41

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Commissioner or to any officer authorized by the Commissioner in that behalf complete information and full particulars as to the offence or evasion. (3) Every list published under this section shall specify—(a) The name, address, and occupation or description of the taxpayer: (b) Such particulars of the offence or evasion as the Comissioner thinks fit: (c) The year or years in which the offence or evasion occurred: (d) The amount or estimated amount of the income not disclosed or of the tax or charge evaded: (e) The amount (if any) of the penal tax or penal charge imposed. (4) A copy of every list published under this section shall be laid before Parliament. PART X General

230. (1) The Commissioner may, by notice in writing require any person, whether a taxpayer or not, to attend and give evidence before him, or before any -officer authorized by him in that behalf, concerning any land, income, return, or assessment, and to produce all books and documents iii that person's custody or under his control relating thereto. (2) The Commissioner may require such evidence to be given on oath, and either verbally or in writing, and for that purpose he or the officer authorized as aforesaid may administer an oath.

Conduct of inquiries by Commissioner. 1923, No. 21, s. 161

231. The Commissioner or any officer authorized by him in that behalf shall at all times have full and free access to all lands, buildings, places,' books, and documents for the purpose, of inspecting the same in the execution of his office, and for this purpose may make extracts from or copies of any such books or documents.

Commissioner to have access to premises and documents. 1923, No. 21, s. 162

232. (1) The Commissioner shall compile and keep a register of the following classes of securities, namely—(a) Post Office Investment Certificates: (b) Debentures issued under the New Zealand Loans Act, 1908, or the' New Zealand Loans Act, 1932, if the interest thereon is payable "to bearer:

Comissioner to compile register of hearer debentures and other securities. 1932-33, No. 40, s. 10

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(c) Debentures issued by the Rural Intermediate Credit Board under the authority of the Rural Intermediate Credit Act, 1927, if the interest thereon is payable to bearer: (d) Bonds issued by the State Advances Superintendent under the authority of the Rural Advances Act, 1926, if the interest thereon is payable to bearer: (e) Any other classes of securities to which this section may be applied by the GrovernorGreneral in Council. (2) The Register shall record — (a) The names and descriptions of the holders of the securities: (b) The amount for which such securities have been issued: (c) The due dates thereof: (d) The rate of interest payable thereon: (e) Such other particulars as the Commissioner thinks proper. (3) The register shall be compiled from annual or other returns to be furnished to the Commissioner pursuant to Part II of this Act. (4) The registered holder of any such securities shall be personally responsible for the making of income tax returns in respect thereof, and shall be assessable and liable for income tax (though not to the exclusion of any other person) in respect of the income derived therefrom unless he satisfies the Commissioner, before he has been assessed for income tax in any year, that he has transferred or assigned the securities, and has given notice to the Commissioner in the prescribed form of the name, address, and description of the transferee or assignee. (5) Every transferee or assignee of any such securities shall in like manner remain personally liable in respect thereof (though not to the exclusion of any other person) unless and until he has given notice to the Commissioner in the prescribed form of the transfer or assignment of the same. (6) Any tax paid by the former holder of any such securities in respect of the income derived therefrom by a subsequent holder shall be deemed to be paid on behalf of that subsequent holder so far as it does not exceed

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the tax (if any)- to which the subsequent holder would himself have been liable in respect of such income, and may be recovered by the former holder from such subsequent holder accordingly.

233. (1) Every person, whether a taxpayer or not (including any officer employed in or in connection with any Department of the Government or by any public authority) shall, if required by the Commissioner or by any officer authorized by him in that behalf, furnish in writing any information or produce any books or documents which the Commissioner or any such officer considers necessary or relevant for any purpose relating to the administration or enforcement of this Act or any other Act imposing taxes or duties recoverable by the Commissioner, and which may be in the knowledge, possession, or control of that person. (2) Without limiting the foregoing provisions of this section, it is hereby declared that the information in Avriting which may be required under this section shall include lists of shareholders of companies, with the amount of capital contributed by and .dividends paid to each shareholder, copies of balance sheets and of profit and loss and other accounts, and statements of assets and liabilities.

Information to be furnished on request of Commissioner. 1948, No. 78, s. 12

234. (1) Subject to subsection two of this section, every person carrying on business shall keep sufficient records in the English language to enable his assessable income and allowable deductions to be readily ascertained by the Commissioner or any officer authorized by him in that behalf, and shall retain all such recor.ds so kept after the third day of December, nineteen hundred and forty-eight (being the date of the passing of the Finance Act (No. 2), 1948), and all records relating to that business in existence at that date, for a period of at least seven years after the completion of the transactions, acts, or operations to which they relate. (2) This section shall not require the retention of any records- — {a) In respect of which the Comissioner has notified the taxpayer that retention is not required: (b) Of a company which has been wound up and fin ally .dissolved.

Keeping of business records. 1948, No. 78, s. 11

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(3) For the purpose of this section the term " records " includes books of account recording receipts or payments or income or expenditure, and also includes vouchers, invoices, receipts, and such other documents as are necessary to verify the entries in any such books of account. (4) Every person who fails to comply with this section commits an offence against this Act.

235. Every person shall from time to time, as required by the Commissioner, make a return of all persons employed by him during any year, and of all salaries, wages, allowances, and other emoluments received .during that year by each person so employed.

Employers to make returns as to employees. 1923, No. 21, s. 164

236. Every bank, local or public authority, or other company or person who in the course of business holds money by way of deposit and allows interest thereon shall from time to time, as required by the Commissioner, make a return of all interest so allowed during the year or other period to which the requisition of the Commissioner relates, together with the names, addresses, and occupations of the persons to whom such interest has been allowed.

Returns of interst paid on deposits. 1923, No. 21, s. 165

'237. Every company or local or public authority shall from time to time, as required by the Commissioner, make a return giving such particulars as the Commissioner requires relative to debentures issued by that company or local or public authority, the holders thereof, and the interest paid or payable thereon.

Returns as to debentures and interest thereon. 1923, No. 21, s. 166 ' '

Declarations to be exempt from stamp duty. 1923, No. 21, s. 167

238. Every affidavit or declaration made for the purposes of this Act shall be exempt from stamp duty.

239. (1) In any case where the Commissioner is satisfied that tax has been paid in excess of the amount properly payable he shall refund the amount paid in excess if written application for the refund is made by or on behalf of the taxpayer—(a) In any case where the assessment of the tax has not been altered, within four years after the end of the year in which the assessment was made; or (b) In any case where the original assessment has been altered (whether once or more than once), within four years after the end of the year in which the original assessment was made.

Excess tax may be repaid within four years. 1944, No. 28, s. 8

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(2) In any case where an assessment has been altered so as to increase the amount of tax payable and the Commissioner is satisfied that by reason of that alteration tax has been paid in excess of the amount properly payable, he shall refund the amount so paid in excess by reason of that alteration if written application for the refund is made by or on behalf of the taxpayer within four years after the end of the year in which the alteration was ma.de, notwithstanding that the application may be made after the time allowed by subsection one of this section.

240. I n any case where the Commissioner is satisfied that income tax, social security charge, or any other tax has been paid in respect of any income which is exempt from taxation by virtue of any Order in Council under section one hundred and fifty-nine or under section one hundred and sixty hereof (whether made before or after the passing of this Act), being income derived before the date of the Order in Council, the Commissioner, notwithstanding anything to the contrary in the last preceding section or in regulation 19a of the Social Security Contribution Regulations 1939, may refund the amount of the tax or charge so paid if written application therefor is made by or on behalf of the taxpayer at any time within four years after the date of the Order in Council.

Refund of " income tax'* paid on lireome subsequently • exempted by Order in ' Council. • 1946, No. r §B, s; e

241. (1) In any case where it is shown to the satisfaction of the Commissioner—(a) That any taxpayer has suffered such loss or is in such circumstances that the exaction of the full amount of the tax has entailed or would entail serious hardship; or (b) That, owing to the death of any person who if he had not died would have been liable to pay tax, the dependants of that person are in such circumstances that the exaction of the full amount of the tax has entailed or would entail serious hardship,— he may, subject to the provisions of this section, release the taxpayer or the executor or administrator of the deceased taxpayer (as the case may be) wholly or in part from his liability, and may make such alterations in the assessment as are necessary for that purpose; and may, if the tax as previously assessed or any part thereof has

In cases of serious hardship Commissioner may grant relief to taxpayer. 1937, No. 36, s. 7 1950, No. 87, s. 16

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been already paid, refund any tax paid in excess of the amount of the assessment as altered pursuant to this section. (2) No amount of tax for any year of assessment,, whether before or after the passing of this Act, in excess of one hundred pounds shall be remitted or refunded under this section except with the approval of the Minister of Finance. (3) Any refund of tax under this section may be made without further appropriation than this section.

242. (1) There is hereby established a special committee to consider and make recommendations in accordance with this section in respect of any objection that may be received by the Commissioner on the ground that an assessment of taxable income made in respect of any taxpayer pursuant to the provisions of the last preceding section or any other provisions requiring or empowering the Commissioner to assess the taxpayer for income tax upon a taxable income not being or purporting to be income in fact derived by that taxpayer, but being an income deemed for the purposes of this Act to have been derived by him, is in excess of the taxable income which was in fact derived by him .during the income year to which the assessment relates. (2) The aforesaid special committee shall consist of—(а) The Commissioner of Taxes; (б) The Solicitor-General; and (c) The Secretary to the Treasury. (3) In the absence from any meeting of the committee of any of the aforesaid members, any officer of the Department controlled by him may, with his authority, attend the meeting in his stead, and for the purposes of that meeting shall be deemed to be a member of the committee. (4) The committee shall consider all objections made in accordance with subsection one of this section, and if in any case it is of opinion that the assessment is in respect of a taxable income in excess of the taxable income in fact derived by the taxpayer during the income year to which the assessment relates, it may recommend to the Minister of Finance that the assessment be reduced by an amount specified in the recommendation.

Appointment of special committee to consider objections to arbitrary assessments of income tax. 193 d, No. 34, s. 26

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(5) For the purpose of considering any objection under this section, the committee shall have free access to all records under the control of the Commissioner relating to the taxpayer. (6) On receipt by the Minister of the recommendations of the committee he may refer the matter back to the committee for further consideration and recommendation, or he may authorize the Commissioner to reduce the assessment by such amount as he thinks fit, not exceeding the amount of the reduction recommended by the committee. (7) For the purposes of the foregoing provisions of this section any recommendation made by not less than two members of the committee shall be deemed to be a recommendation of the committee. (8) Nothing in this section shall affect the powers of the Commissioner under the last preceding section.

243. Every contract, agreement, or arrangement made or entered into, whether before or after the coming into operation of this Act, shall be absolutely void in so far as, directly or indirectly, it has or purports to have the purpose or effect of in any way altering the incidence of income tax, or relieving any person from his liability to pay such tax.

Agreements purporting to alter incidence of taxation to be void. 1923, No. 21, s. 170 1940, No. 3, s. 12

244. (1) Nothing in the last preceding section shall be so construed as to render void any contract, agreement, or arrangement made or entered into by any company (whether before or after the coming into operation of this Act) to the effect that the interest on any debentures issued by that company shall be free of income tax; and all such contracts, agreements, and arrangements are hereby declared to be valid and effective in accordance with this section unless the company is expressly or impliedly prohibited, by its memorandum or articles of association, from making or entering into any such contract, agreement, or arrangement. (2) Where any debentures issued by a company purport to be issued free of income tax the company shall be liable for the payment of the income tax payable in respect thereof, and the debentureholders shall be entitled to receive the full amount of interest payable pursuant to the debentures.

Debentures issued free of income tax. 1923, No. 21, s. 1.71

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245. (1) The Governor-General may from time to time, by Order in Council gazetted, make regulations, not inconsistent with this Act, for the following purposes:— (a) Prescribing the duties and functions of officers and other persons appointed or employed under this Act: (b) Prescribing the form of returns to be made, the particulars to be set forth therein, the persons by whom and the time when or within which such returns shall be made, and the forms of the assessments, notices, and other documents referred to in this Act or necessary in order to give effect thereto: (c) Providing, where there is no provision in this Act or no sufficient provision in respect of any matter or thing necessary to give effect to this Act, in what manner and form the deficiency shall be supplied: (d) Making any provision which may be convenient for the administration of this Act or which f may be desirable or necessary in order to carry its objects into full effect. (2) All regulations made under this Act shall have the same force and effect as if they were contained in this Act, and the existence and provisions thereof shall

Regulations. 1923, No. 21, s. 172

be judicially noticed. 246. (1) If anything required by or under this Act to be done at or within a fixed time cannot be or is not so done, the Grovernor-Greneral, by Order in Council, may from time to time appoint a further or other time for doing the same, whether the time within which the same ought to have been done has or has not expired. (2) Anything done within the time prescribed by such Order in Council shall be as valid as if it had been done within the time fixed by or under this Act.

Power to extend time for doing anything under Act. 1923, No. 21, s. 173

Repeals and savings.

247. (1) The enactments specified in the Second Schedule to this Act are hereby repealed to the extent therein indicated. (2) All offices, appointments, oaths of office, regulations, Proclamations, Orders in Council, warrants, orders, registers, notices, advertisements, returns, assessments, objections, and generally all acts; of authority and acts of

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parties, and all periods of time, which originated under any of the said enactments, or under any enactment thereby repealed, and are subsisting or in force at the coming into force of this Act, shall enure for the purposes of this Act, and accordingly shall, where necessary, be deemed to have so originated, but not so as to extend any period of time that began to run before the coming into force of this Act; but any act of authority that could have been revoked or altered under the enactment under which it originated, or under which it enured at the doming into force of this Act, may be revoked or altered under the powers conferred by this Act. (3) For all purposes whatsoever in respect of any tax which at the coming into force of this Act has been already assessed or paid or is still assessable or payable in or for the year ending on the thirty-first day of March, nineteen hundred and fifty-two, or in or for any previous year, in accordance with the provisions of any enactment hereby repealed, that enactment and all the provisions thereof, including its penal provisions, and all regulations, warrants, and other acts of authority originating thereunder, shall, notwithstanding the repeal thereof, be deemed to remain in full force and effect; and all proceedings under any such enactment, including proceedings for the recovery of any fine or penalty in respect of any offence committed, whether before or after the coming into force of this Act, may be taken accordingly as if this Act had not been passed. (4) All proceedings in respect of offences committed or alleged to be committed against any enactment hereby repealed before the coming into force of this Act may be instituted or continued as if this Act had not been passed. (5) All matters and proceedings commenced under any of the said enactments and pending or in progress at the coming into force of this Act may be continued, completed, and enforced under that enactment or under this Act. (6) Notwithstanding the repeals hereby effected, the enactments set out in the Third Schedule hereto shall continue in force with the same effect as they had immediately before the coming into force of this Act.

248. The enactments mentioned in the Fourth Schedule to this Act are hereby amended in the manner indicated in that Schedule.

\ Consequential amendments.

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SCHEDULES FIRST SCHEDULE Part A Interpretation 1. For the purposes of this Schedule, — " Taxable income " means income on which income tax is payable: The effective rate of tax for any income shall be ascertained by computing tax on that income in accordance with the rates of tiax specified in Part B of this Schedule and dividing the tax so computed by the number of pounds included in that income. Debentures Issued by Companies and< Local and Public Authorities 2. On income assessable under subsection (3) of section 177 or subsection (3) of section 179 of this Act, the basic rate of income tax for every £1 of the taxable income shall be as follows: (a) Where the income has been derived from debentures issued by a company on terms providing for the payment of income tax by the company, as provided in section 244 of this Act, the basic rate shall be Bs. Bd. (&) In every other case, the basic rate shall be 12s. Companies and Public Authorities 3. On all income not included within clause 2 of this Schedule the basic rate of income tax for every £1 of the taxable income shall, in the case of companies and public authorities, be as follows: — (a) Where the taxable income does not exceed £6,300, the basic rate shall he 2s. 6d. increased by for every £1 of taxable income. (&) Where the taxable income exceeds £6,300, the basic rate shall be 7s. 9d., increased by for every £1 of the taxable income in excess of £6,300, but so as not to exceed in any case the rate of Bs. Bd. in the £l. Other Taxpayers 4. (1) On all income not included within clause 2 of this Schedule the basic rates of income tax shall, in the case of all taxpayers other than companies and public authorities, be as provided in this clause. (2) Where the total income derived by the taxpayer during the income year did not include any non-assessable income to which section 86 of this Act applies, the basic rate for every £1 of the taxable income shall be a rate equal to the effective rate of tax for the taxable income. (3) Where the total income derived by the taxpayer during the income year included non-assessable income to which section 86 of this Act applies, then, notwithstanding anything to the

Schedules. Section &

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contrary in that section, the basic rate for every £1 of the taxable income shall be ascertained by computing the amount by which tax at the effective rate on a taxable income equal m amount to the total of the taxable income and of the nonassessable income exceeds tax at the effective rate on a taxable income equal in amount to the non-assessable income, and dividing the amount of that excess by the number of pounds included in the taxable income. Part B Rates Referred to in Clause 1 of Part A The rate of tax for On so much of the income as every £1 shall be — s. d. Does not exceed £lOO .. • • • • 2 6 Exceeds £lOO but does not exceed £2OO .. I 9 £2OO „ £3OO .. 3 0 ;; £3OO „ £4OO .. 3 3 £4OO „ £so° •• I ® £5OO „ £6OO •• 3 9 ;; £6OO „ £7OO .. 4 0 £7OO „ £BOO .. 4 3 I; £BOO „ £9OO .. 4 6 £9OO „ £l,oo° •• J ® „ £l,OOO „ £l,lo° •• \ 2 ;; £l,lOO „ £1,200 .. 5 3 £1 200 „ £1,300 .. 5 6 £1,300 „ £1,400 .. 5 9 £1,400 „ £1,500 .. 6 0 „ £1,500 „ £1,600 .. 6 3 " £1,600 „ £1,700 .. 6 6 „ £1,700 „ £l,BOO .. 6 9 „ £l,BOO „ £1.900 7 0 ;; £1,900 „ £2,000 .. 7 3 „ £2,000 „ £2,100 .. 7 6 ;; £2' loo „ £2,200 .. 7 9 „ £2,200 „ £2,300 .. 8 0 „ £2,300 „ £2,400 .. 8 3 £2,400 „ £2,500 -- 8 6 „ £2,500 „ £2,600 .. 8 9 £2,600 „ £2,700 .. 9 0 " £2,700 „ £2,800 .. 9 3 £2 800 „ £2,900 .. 9 6 i £2,900 „ £3,000 -.9 9 I £3,000 „ £3,i00 •• 10 0 £3 100 £3,200 . - 10 3 " £3 200 £3,300 .. 10 6 ;; ":»» ;; «.«» .. 10. „ £3,400 „ £3,°00 •• 11 0 „ £3,500 „ £3,600 . - 11 3 £3,600 „ £3,700 .. 11 6 : £3,700 „ £3,800 .. 11 9 , £3,800 .. •• •• ..I/O

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SECOND SCHEDULE Section 247 (1) ENACTMENTS REPEALED Part I —General Enactments 1923, No. 21— The Land and Income Tax Act, 1923. (Reprint of Statutes, Vol. VII, p. 271.) 1924, No. 22 The Land and Income Tax Amendment Act, 1924. (Reprint of Statutes, Vol. VII, p. 341.) 1924, No. 64 The Finance Act, 1924: Section 12. < (Reprint of Statutes, Vol. VII, p. 341.) 1925, No. 12— The Land and Income Tax Amendment Act, 1925. (Reprint of Statutes, Vol. VII, p. 343.) 1926, No. 24 The Land and Income Tax Amendment Act, 1926. (Reprint of Statutes, Vol. VII, p. 343.) 1927, No, 12— The Land and Income Tax Amendment Act, 1927. (Reprint of Statutes, VoL VII, p. 345.) 1929, No. 12— The Land and Income Tax Amendment Act, 1929. (Reprint of Statutes, Vol. VII, p. 346.) 1930, No. 8— The Land and Income Tax Amendment Act, 1930. (Reprint of Statutes, Vol. VII, p. 348.) 1931, No. 20— The Land and Income Tax Amendment Act, 1931. (Reprint of Statutes, Vol. VII, p. 352.) 1931, No. 44r — The Finance Act, 1931 (No. 4) : Section 13. 1932, No. 8— The National Expenditure Adjustment Act, 1932: Subsection (8) of section 46. 1932-33, No. 40— The Land and Income Tax Amendment Act, 1932-33. 1932-33, No. 42 The Finance Act, 1932-33: Section 10. 1933, No. 43 The Land and Income Tax Amendment Act, 1933. 1934, No. 31— The Finance Act (No. 3), 1934: Section 8. 1935, No. 32 The Land and Income Tax Amendment Act, 1935.

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SECOND SCHEDULE—continued Enactments Repealed—continued Part I—General Enactments —continued 1936, No. 34 The Land and Income Tax Amendment Act, 1936. 1937, No. 17— The Finance Act, 1937: Section 21. 1937, No. 36 The Finance Act (No. 2), 1937: Sections 3to 7. 1938, No. 13— The Finance Act, 1938: Part 11. 1939, No. 3 The Finance Act, 1939 : Sections 12 to 16 and 18 to 20. 1939, No. 34 The Land and Income Tax Amendment Act, 1939 : Sections 3 to 13 and 15 to 32, and subsections (1) to (3) of section 14. 1940, No. 3 The Land and Income Tax Amendment Act, 1940. 1940, No. 6 The Finance Act, 1940: Subsection (1) of section 12. 1940, No. 19— The Finance Act (No. 2), 1940; Part 11. 1940, No. 26 The Finance Act (No. 3), 1940: Section 2. 1941, No. 18— The Land and Income Tax Amendment Act, 1941: Subsections (4), (5), (8), and (9) of section 3, and sections 4 to 8. 1942, No. 2 The Finance Act, 1942: Part I. 1942, No, 14— The Finance Acti (No. 2), 1942: Section 16. 1943, No. 2 The Finance Act, 1943: Section 3, except subsections (6) and (8). 1943, No. 9 The Finance Act (No. 2), 1943: Section 8. 1943, No. 15— The Finance Act (No. 3), 1943: Sections 8 and 9. 1944, No. 28— The Land and Income Tax Amendment Act, 1944. 1945, No. 37 The Land and Income Tax Amendment Act, 1945. 1946, No. 38— The Land and Income Tax Amendment Act, 1946: Except subsection (2) of section 3.

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SECOND SCHEDULE—continued Enactments Repealed—continued Part I—General Enactments—continued 1947, No. 6 The Finance Act, 1947: Sections 9 and 10. 1947, No. 45 The Finance Act (No. 2), 1947: Sections 10 and 11. 1948, No. 78— The Finance Act (No. 2), 1948: Part 11. 1949, No. 29 The Land and Income Tax Amendment Act, 1949. 1950, No. 22 The Land and Income Tax Amendment Act, 1950. 1950, No. 87— The Land and Income Tax Amendment Act (No. 2), 1950 Part ll—Annual Taxing Acts 1915, No. 39 The Finance Act, 1915: Sections 2to 5. 1917, No. 9 The Finance Act, 1917: Schedule. 1923, No. 25 The Land and Income Tax (Annual) Act, 1923. 1924, No. 21— The Land and Income Tax (Annual) Act, 1924. 1925, No. 13— The Land and Income Tax (Annual) Act, 1925. 1926, No. 9 The Land and Income Tax (Annual) Act, 1926. 1927, No. 12— The Land and Income Tax (Annual) Act, 1927. 1928, No. 19— The Land and Income Tax (Annual) Act, 1928. 1929, No. 13— The Land and Income Tax (Annual) Act, 1929. 1930, No. 7 The Land and Income Tax (Annual) Act, 1930. 1931, No. 21— The Land and Income Tax (Annual) Act, 1931. 1932, No. 7 The Land and Income Tax (Annual) Act, 1932. 1933, No. 1— The Land and Income Tax (Annual) Act, 1933. 1934, No. 13--The Land and Income Tax (Annual) Act, 1934.

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SECOND SCHEDULE —continued Enactments Repealed—continued Part ll—Annual Taxing Acts—continued 1935, No. 2 The Land and Income Tax (Annual) Act, 1935. 1936, No. 35 The Land and Income Tax (Annual) Act, 1936. 1937, No. 5 The Land and Income Tax (Annual) Act, 1937. 1938, No. 8— The Land and Income Tax (Annual) Act, 1938. 1939, No. 4 The Land and Income Tax (Annual) Act, 1939. 1939, No. 29 The War Expenses Act, 1939: Part 11. 1940, No. 4 The Land and Income Tax (Annual) Act, 1940. 1941, No. 8— The Land and Income Tax (Annual) Actl, 1941. 1942, No. 3 The Land and Income Tax (Annual) Act, 1942. 1943, No. 10— The Land and Income Tax (Annual) Act, 1943. 1944, No. 9 The Land and Income Tax (Annual) Act, 1944. 1945, No. 5 The Land and Income Tax (Annual) Act, 1945. 1946, No. 12— The Land and Income Tax (Annua!) Act, 1946. 1947, No. I^The Land and Income Tax (Annual) Act, 1947. 1948, No. 16— The Land and Income Tax (Annual) Act, 1948. 1949, No. 13— The Land and Income Tax (Annual) Act, 1949. 1950, No. 23 The Land and Income Tax (Annual) Act, 1950.

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THIRD SCHEDULE Certain Enactments Continued in Force The Land and Income Tax Act, 1923: Section 94 94. (1) The Corporation sole established under the State Fire Insurance Act, 1908, under the style of " The State Fire Insurance General Manager " shall be liable to income tax in the same manner in all respects as if it were a company to which the last preceding section applies, save that nothing in paragraph (b) of that section shall apply to the said corporation. (2) All moneys payable as income tax by the said corporation shall be paid without further appropriation than this Act out of the State Fire Insurance Account. The Land and Income Tax Amendment Act, 1929: Section 9 9. Where the Public Trustee as the mortgagee of any lands in respect of which the mortgagor has made default has at any time before the passing of this Act become the purchaser of such lands pursuant to any lawful authority, he shall be assessed for land tax in respect of those lands as if he were the mortgagee in possession thereof. The Land and Income Tax Amendment Act, 1935: Section 3 as Amended by Section 5 of the Land and Income Tax Amendment Act, 1936 3. The Masterton Trust Lands Trustees and the G-reytown Irust Lands Trustees shall, in respect of any lands vested in them respectively, be assessed and liable for land tax at one fourth of the rate (if any) that would have been chargeable in respect thereof if this section had not been passed or at the rate of one halfpenny in the pound of the unimproved value on which land tax is payable, whichever is the greater.

Section 247 (6)

FOURTH SCHEDULE Consequential, Amendments

176

Section 248 CONSEQUENTIAL AMENDMENTS Sessional Number and Short Title of Act. Number of Section Affected! Nature of Amendment. 1940, No. 6— The Finance Act, 1940 1941, No. 18— The Land and Income Tax Amendment Act, 1941 1947, No. 45— The Finance Act (No. 2), 1947 .. j Section 12 (1) Section 12 (2) Section 12 (3) Section 3 (2) Section 3 (3) Section 9 (1) By repealing this subsection. By omitting the words " shall be deemed to be income derived by that member for the purposes of the Land and Income Tax Act, 1923, but ". By omitting the words " income tax ". By omitting the words " income tax ". By omitting the words " Part VI of the principal Act and By omitting the words " income tax and •

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SOCIAL SECURITY CHARGE BILL EXPLANATORY NOTE The Bill is a compilation of the provisions of the Social Security Act, 1938, relating to the social security charge and the amendments of those provisions now in force. It assembles the existing legislation relating to the social security charge into one enactment, but makes no change in the law, except that the effect of section 136 of the Social Security Act, 1938, is not repeated, it being considered that clause 21 of the Bill (section 121 of that Act), and regulations enuring under clause 40 of the Bill, make sufficient provision for the purposes of the Bill. The disposition in the Bill of existing provisions to be repealed and replaced, and the reasons for omission of existing provisions to be repealed without replacement are shown in the subjoined Comparative Table. The sources of the clauses of the Bill are shown in the marginal notes. A general exemption from liability for (inter alia) the social security charge is granted, or authorized to be granted, to persons possessing certain diplomatic or ■equivalent status or immunity by the following enactments : The Diplomatic Privileges Act, 1708 (Imp.), 7 Ann., c. 12. 1943, No. 9 : The Finance Act (No. 2), 1943, s. 7. 1947, No. 39 : The Diplomatic Privileges Extension Act, 1947. No references to these enactments would be appropriate in the Bill. COMPARATIVE TABLE Disposition in Bill, or Reason for Omission, op Enactments Repealed by the Bill Reasons for omission are indicated as follows : a A Short Title. b A declaration of inclusion in the principal Act. c A date of commencement or application. d A repeal of a previous enactment. e An amendment of the previous enactment mentioned. g An enactment repeated in this Bill, but not repealed. h An enactment treated as spent. R. denotes a provision already repealed by the previous enactment mentioned. 1938, No. 7—The Social Security Act, 1938 Section. Clause of Bill or Reason for Omission. 108 .. 2 109 .. .. .. •• 5 11 6 11 7 11 10 113 (1) (a) .. • • • • 1945 > No - 45 > s - 23 ( 2 )- 113 (1) (6) • ■ • • .. h 113 (1) (c) 4 113 (2) .. .. ... h.. 114 . .. .. R., 1945, No. 45, s. 23 (3). 115 .. .. .. R., 1945, No. 45, s. 23 (3). 11 R., 1945, No. 45, s. 23 (3). 117 .. ~ .. .. R., 1945, No. 45, s. 23 (3).

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1938, No. 7—The Social Security Act, 1938—continued Section. Clause of Bill or Reason for Omission. 118 (1), (2) 11 113 (3), (4) 13 118 (5), (6) 17 11 19 120 .. .. .. ..20 12 21 122 .. .. .. ..23 123 .. .. .. ..25 12 26 125 .. .. .. .. 27 126 .. .. .. ..32 127 .. .. .. ..3 128 .. .. .. .. 33 129 .. .. .. ..34 130 .. .. .. ..35 13 36 132 .. .. .. .. R., 1947, No. 6, s. 17. 133 .. .. .. .. R., 1947, No. 6, s. 17. 134 .. .. .. .. R., 1947, No. 6, s. 17. 13 d, h 137 .. .. .. .. g (cf. 37). 138 .. .. .. .. g{ c f. 38). 139 .. .. .. .. g(cf. 39). 140 .. .. .. .. g ( c f. 40). 141 .. .. .. .. g (cf. 41). 1939, No. 31—The Social Security Amendment Act, 1939 Section. Clause of Bill or Reason for Omission. 16 .. .. .. .. e (1938, No. 7, s. 109). 17 (1) .. .. .. e (1938, No. 7, s. 112). 17 (2) .. .. .. 10 (3). 18 .. .. .. ..12 19 .. .. .. .. e (1938, No. 7, s. 122). 20 .. .. .. .. e (1938, No. 7, s. 124). 21 .. .. .. ..28 22 .. .. .. .. d (1938, No. 7, s. 127 (5)). 1939, No. 34 —The Land and Income Tax Amendment Act, 1939 Section. Reason for Omission. 1 . . . . . . . . a, b 2 .. .. .. .. c 14 (4) .. .. .. e (1938, No. 7, s. 127 (1)). 1940, No. s—The5 —The Social Security Amendment Act, 1940 Section. Clause of Bill or Reason for Omission. 2 .. .. .. ..29 3 .. .. .. .. 30 4.. .. .. .. e (1938, No. 7, s. 125). 5 (1) .. .. .. e (1938, No. 7, s. 127 (3)). 5 (2) .. .. .. d (1938, No. 7, s. 127 (7)).

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1940, No. 6 —The Finance Act, 1940 Section. Clause of Bill or Reason for Omission. 12 (2) .. .. .. 8 12 (3) .. .. .. c 1940, No. 26—The Finance Act (No. 3), 1940 Section. Clause of Bill or Reason for Omission. 4 (1) ... .. .. b 4 (2), (4) 16 4 (3) .. .. •- 24 4 (5) .. .. .. h 1941, No. 4—The Finance Act, 1941 Section. Reason for Omission. 24 .. .. .. .. -e (1938, No. 7, s. 124). 25 .. .. .. .. h 1941, No. 14 —The Social Security Amendment Act, 1941 Section. Clause of Bill. 11 9(cf. 40(4)). 1941, No. 18—The Land and Income Tax Amendment Act, 1941 Section. Clause of Bill or Reason for Omission. 3 (1) to (3), (6) and (7) .. 31 3 (10) .. .. .. e (1938, No. 7, s. 125 (2), and 1940, No. 5, s. 2 (3)). 1942, No. 14 —The Finance Act (No. 2), 1942 Section. Clause of Bill or Reason for Omission. 13 (1) to (5) .. .. 14 13 (6) .. .. .. R., 1943, No. 2, s. 2 (5). 13 (7), (8) h 13 (9) .. .. .. d (1942, No. 2, s. 11). 14 .. .. .. .. e (1938, No. 7, s. 112). 1943, No. 2—The Finance Act, 1943 Section. Clause of Bill. 2 .. .. .. ..15 3 (6), (8) 18 1943, No. 19—The Social Security Amendment Act, 1943 Section. Reason for Omission. 29 .. .. .. .. e (1938, No. 7, s. 110).

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1945, No. 45—The Finance Act (No. 2), 1945 Section. Reason for Omission. 18 • - .. .. .. e (1938, No. 7, s. 126). 23 (1) .. .. .. d (1938, No. 7, s. 108 (a)). 23 (2) .. .. .. d (1938, No. 7, s. 113 (1) (a)). 23 (3) .. .. .. d (1938, No. 7, ss. 114 to 117) 1946, No. 38—The Land and Income Tax Amendment Act, 1946 Section. Reason for Omission. 3 (2) .. .. .. e (1938, No. 7, s. 125 (3)). 1946, No. 41—The Finance Act (No. 2), 1946 Section. Clause of Bill. 12 .. .. .. .22 1947, No. 6—The Finance Act, 1947 Section. Clause of Bill or Reason for Omission. 11 (2) .. .. .. e (1938, No. 7, s. 113). 13.. ... .. .. e (1939, No. 31, s. 21 (1)). 15 • • • ■ .. .. e (1938, No. 7, s. 110). 16-- .. .. .. e (1943, No. 2, s. 2 (4), (5)). 17 - • .. .. .. d (1938, No. 7, ss. 132 to 134). 1947, No. 45—The Finance Act (No. 2), 1947 Section. Clause of Bill or Reason for Omission. 9 .. .. .. .. 9 12 ■ • .. .. .. e (1938, No. 7, s. 125). 1948, No. 78—The Finance Act (No. 2), 1948 Section. Reason for Omission. 24 .. .. .. .. e (1938, No. 7, s. 120). 1950, No. 49—The Social Security Amendment Act, 1950 Section. Clause of Bill. 24 .. .. .. .. 6 (5), (6).

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Hon. Mr. Bowden SOCIAL SECURITY CHARGE ANALYSIS

Title. 1. Short Title and commencement. Social Security Charge 2. Social security charge. 3. " Income " defined. 4. Rate of social security charge. 5. Commissioner to assess and collect social security charge. 6. Persons liable for payment of social security charge. Exemptions 7. Exemptions from liability to pay social security charge. 8. Special exemption of augmented salaries of members of General Assembly. 9. Exemption of certain allowances. 10. Commissioner may grant personal exemptions. Special Provisions as to Charge 11. Charge on salary and wages to be deducted by employers. 12. Payment of charge on benefits in kind. 13. Determination as to whether remuneration is salary or wages. 14. Deduction at source of charge on income included in certain payments. 15. Deduction and refund of charge on income included in certain payments. 16. Adjusting liability for charge in certain eases. 17. Charge on income whieh has been credited or applied. Deductions to be held in trust. 18. Assessable income of serving employee deemed salary or wages. 19. Offences by employers. 20. Due dates of payment of charge on income other than salary or wages.

| 21. Penalties for wilful evasion of charge. 22. Penal charge in case of evasion of charge 011 salary or wages. 2,">. Commencement and termination of liability for charge on income other than salary or wages. 24. Adjusting liability for charge in certain cases. 25. Assessment of charge on income other than salary or wages. 26. Special provisions as to trustees. 27. Liabilities of companies for charge. 28. Company liable to charge may adjust dividends payable to preference shareholders. 29. Liability of non-resident companies for charge. 30. Liability for charge of certain public authorities. 3.1. Liability of banking companies for charge. 32. In computing charge, Commissioner may set off losses against subsequent income. Collection and Recovery of Social Security Charge 33. Social security stamps. 34. Mode of payment of soe i a 1 security charge. 35. Recovery of social security charge. 36. Burden of proving exemption. General ; 37. Proceedings for offences. 38. General penalty for offences. 39. Exemptions from stamp duty. 40. Regulations. 41. Annual reports. I Repeals, Savings, and Amendments 42. Repeals and savings. j 43. Amendments to Social Security Act, 1938. ! Schedule.

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A BILL INTITULED An Act for the Compilation of Certain Enactments Relating to the Social Security Charge. BE IT ENACTED by the General Assembly of New Zealand in Parliament assembled, and by the authority of the same, as follows: — 1. (1) This Act may be cited as the Social Security Charge Act, 1951. (2) This Act shall come into force on the first day of April, nineteen hundred and fifty-two.

Title.

Short Title and commencement.

Social Security Charge 2. The social security charge referred to in paragraph (a) of section one hundred and five of the Social Security Act, 1938, shall consist of a charge on salaries, wasres. and other income.

Social security charge. 1938, No. 7, s. 108

3. (1) For the purposes of the assessment of the charge on income in accordance with the provisions of this Act the term " income " (except as otherwise provided in this section) includes all income assessable under the Land and Income Tax Act, 1951 (whether the income is taxable under that Act or not), and also includes interest of the kind referred to in section one hundred and forty-seven or in section two hundred and forty-four of that Act, and non-assessable income of the classes referred to in section one hundred and fifty-eight an.d in paragraph (w) of section ninety-seven of that Act, and all dividends derived from companies, but does not include any other income. (2) In any case where, pursuant to section one hundred and sixteen of the Land and Income Tax Act, 1951, the Commissioner has, whether before or after the commencement of this Act, made for the purposes of income tax an apportionment of any income derived for any financial year, the apportionment shall operate for the purposes of the charge imposed on income by this Act in the same manner and to the same extent as it operates for the purposes of income tax. (3) Compensation received under the Workers' Compensation Act, 1922, whether as a lump sum or by weekly payments, or stakes that are subject to stakes duty in accordance with section one hundred and ninety-four of the Stamp Duties Act, 1923, shall not for the purposes of this Act be regarded as income.

" Income " defined. 1938, No. 7, s. 127 1939, No. 31, s. 22 • 1939, No. 34, s. 14 (4) 1940, No. 5, s. 5

See 1922, No. 39

See 1923, No. 26

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(4) In assessing the charge payable by any person in respect of income other than salary or wages derived by him for any financial year there shall be deducted from his income, as defined by this section, all amounts paid by him in that year as interest tax under the Finance Act, 1932-33. (5) Dividends derived from a company liable under this Act to a charge on its income and declared by the company at any time after the thirty-first day of March, nineteen hundred an.d thirty-nine, shall be exempt from the charge imposed by this Act. (6) If on the winding up of any company any shareholder receives in respect of his shares (whether in money or money's worth) more than the amount of the capital paid up thereon, the excess of the amount received by the shareholder over the amount paid up on his shares shall be deemed to be a dividend declared by the company in the year in which it is received by the shareholder.

See 1932-33, No. 42

4. The rate of the charge on salaries, wages, and other income shall be one penny for every sum of thirteen and one third pence or part thereof included in every amount in respect of which the charge is payable.

Bate of social security charge. 1938, No. 7, s. 113 1947, No, 6, s. 11 (2)

5. (1) The provisions of this Act, relating to the assessment, collection, and recovery of the social security charge shall be administered as if the social security charge were income tax. (2) Subject to any special provisions in this Act, the Commissioner and Deputy Commissioner of Taxes, and all other officers appointed for the purposes of the Land and Income Tax Act, 1951, shall have in respect of the social security charge the same powers as they have in respect of income tax, and, subject as aforesaid, all the provisions of that Act shall apply with respect to the social security charge in the same manner in all respects as they apply with respect to income tax. (3) All references in this Act to the Commissioner shall be deemed to be references to the Commissioner of Taxes. (4) Unless the context otherwise requires, all terms and expressions used in the Land and Income Tax Act, 1951, and also in this Act shall, when used in this Act, have the same meaning as when used in the Land and Income Tax Act, 1951.

Commissioner to assess and collect social security charge. 1938, No. 7, s. 109 1939, No. 31, s. 16

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6. (1) Subject to the provisions of section seven hereof, every person shall be liable for payment of the social security charge who, being of the age of sixteen years or upwards, is for the time being ordinarily resident in New Zealand.

Persons liable for payment of social security charge. 1938. No. 7, s. 110 1943, No. 19, s. 29 1947, No. 6, s. 15 1950, No. 49, s. 24

(2) Every person who (haying arrived in New Zealand before or after the commencement of this Act) has remained or remains in New Zealand for a continuous period of not less than twelve months shall, unless and until he satisfies the Commissioner to the contrary, be deemed for the purposes of this section to be and from the date of his arrival in New Zealand to have been ordinarily resident therein. Nothing in this subsection shall be construed to affect the liability for payment of the social security charge of any person who arrives or has arrived in New Zealand with the intention of becoming resident therein. (3) Every person for the time being engaged under New Zealand articles on an intercolonial trading ship within the meaning of the Shipping and Seamen Act, 1908, shall, for the purposes of this Act, be deemed to be ordinarily resident in New Zealand unless, in the case of any such person who is not in fact ordinarily resident in New Zealand, he satisfies the Commissioner that he is liable in the country in which he is ordinarily resident to a special tax or charge levied to provide funds in relief of unemployment or for the provision of social services or, where no such special tax or charge is levied, that he is chargeable in that country with income tax in respect of the salary or wages derived under those articles and that any amount payable by him in respect of any such special tax or charge or income tax has been or will be paid. (4) Every person who is absent from New Zealand in the service in any capacity of the Government of New Zealand, and the wife of any such person if she is absent from New Zealand with him, shall be deemed to be ordinarily resident in New Zealand. (5) For the purposes of the last preceding subsection, a person who is absent from New Zealand in the service in any capacity of the Government of Western

See 1908, No. 178 '

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Samoa or of His Majesty in respect of the Government of the Cook Islands or who is absent from New Zealand as a member of the Western Samoan Public Service or of the Cook Islands Public Service shall be deemed not to be in the service of the Government of New Zealand. (6) In the last preceding subsection — " Western Samoan Public Service " has the same meaning as in the Samoa Amendment Act, 1949: " Cook Islands Public Service " has the same meaning as in the Cook Islands Act, 1915. Exemptions

See 1949, No. 47

See 1915, No. 40

7. (1) Notwithstanding anything in the last preceding section, the Governor-General may from time to time, by Order in Council, exempt any specified classes of persons, in whole or in part, from payment of the social security charge, if, on grounds of public policy, he deems it advisable so to do. (2) Any Order in Council under this section may at any time be in like manner amended or revoked. (3) Any Order in Council under this section may, in accordance with its tenor, be retrospective. (4) Every Order in Council under this section shall be published in the Gazette.

Exemptions from liability to pay social security eharge. 1938, No. 7, s. 11l

8. The amount by which the salary of any member of the General Assembly is augmented pursuant to any scheme referred to in section one hundred and. thirty-one, of the Land and Income Tax Act, 1951, shall not be deemed to be salary, wages, or other income derived by him for the purposes of this Act.

Special exemption of augmented salaries of Members of General Assembly. 1940, No. 6, s. 12

9. (1) The Commissioner may from time to time determine whether and to what extent any allowance in respect of or in relation to the employment or service of any person constitutes a reimbursement of expenditure exclusively incurred by him in the production of his assessable income, an.d the allowance shall to the extent so determined be exempt from social security charge. (2) Every determination of the Commissioner under this section shall be final and conclusive.

Exemption of certain allowances. 1947, No. 45, : : s. 9 ' "

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Commissioner may grant personal exemptions. 1938, No. 7, s. 112 1939, No. 31, s. 17 1942, No. 14, s. 14 1945, No. 45, 8. 23 (3)

10. (1) In addition to the exemptions provided for in section seven hereof, the Commissioner may, by writing under his hand, exempt from liability to pay any specified instalment or instalments of the social security charge, or any penalty imposed by subsection three of section nineteen or by subsection three of section twenty hereof, any person in respect of whom he is satisfied that the payment of the instalment or instalments or penalty would, by reason of the financial circumstances or sickness of the person concerned or of the sickness of any member of his family, constitute a serious hardship. (2) Any exemption under this section may be made retrospective to such date as the Commissioner determines. For the purpose of giving effect to any exemption granted under this section the Commissioner may refund, in whole or in part, any instalment or penalty in any case where application in writing for exemption has been made on or before payment of the instalment or penalty or within twelve months thereafter, but not in any other case. (3) In lieu of exercising in respect of any instalment the powers of exemption conferred on him by this section, the Commissioner, if in any case he thinks fit so to do, may postpone the due date of that instalment; and may postpone the date notwithstanding that the due date may have passed. (4) The powers conferred on the Commissioner by this section may be exercised by him in respect of a company if, having regard to the financial circumstances of the company or to the financial or other circumstances of any shareholders of the company, he thinks fit so to do.

Charge on salaries and wages to be deducted byemployers. 1938, No. 7, s. 118 (1), (2)

Special Provisions as to Charge 11. (1) The charge payable as hereinbefore provided in respect of any salary or wages shall be deducted therefrom at the time of payment by the employer or other person by whom the salary or wages are paid, and the employer or other person as aforesaid shall thereupon affix to the wages sheet or other prescribed document the requisite social security stamps and shall cancel them in the prescribed manner, or shall indicate

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in such other manner as may be prescribed that the charge has been deducted. For the purposes of this section and of sections thirteen and seventeen hereof the expression " salary or wages " includes any bonus, gratuity, extra salary, or emolument of any kind in respect of or in relation to employment or service, and includes special payments such as witnesses' or jurors' fees and any other payments or fees of a like nature. (2) Where any person, in respect of his employment or service, is provided with board or lodging, or the use of a house, or any other benefits in kind whatsoever, the value of such benefits shall, for the purposes of this Act, be deemed to be salary or wages, and the charge in respect thereof shall be payable from time to time as the charge becomes payable in respect of that part of his salary or wages as is payable in money. Subject to any objection that may be made under the Land and Income Tax Act, 1951 } in the application of that Act to the social security charge, the value of any benefits referred to in this subsection shall in case of dispute be determined bv the Commissioner.

12. Where any person, in respect of his employment or service, receives any benefits in kind to which subsection two of the last preceding section applies, but does not receive any payment in money in respect of such employment or service, the charge in respect of the value of such benefits in kind shall become payable on the last day of each week in which any such benefit is received, or on such other dates as the Commissioner, by arrangement with the employer, may determine in anv case.

Payment of charge on benefits in kind. 1939, No. 31, s. 18

13. (1) If any question is raised as to whether or not the remuneration received by any person or class of persons in respect of any work or service or class of work or service is, as to the whole or part thereof, salary or wages, it shall, subject to any regulations made for the purposes of this Act, be decided by the Minister of Finance, whose decision shall be final. The said Minister may also, subject to any such regulations, decide in any case that any person or class of persons liable for the payment of remuneration to any other person or class of persons in respect of work or service shall for the purposes of this Act be deemed to be the

Determination as to whether remuneration is salary or wages. 1938, No. 7, s. 118 (3), (4>

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employer or employers of the last mentioned person or persons, notwithstanding that the legal relationship of employer and servant may not in fact exist between them. (2) If in the opinion of the Minister of Finance the charge on any income other than salary or wages could be more conveniently collected if such income were deemed to be salary or wages, he may authorize the Commissioner to collect the charge on such income as if it were salary or wages, and thereupon the charge shall be payable accordingly and the person by whom any such income is payable shall be deemed for the purposes of this Act to be the employer of the person entitled to receive such income. The provisions of this subsection may be applied in respect of any income notwithstanding that such income may be in any way protected against assignment or charge.

14. (1) The Minister of Finance may from time to time authorize the Commissioner to collect social security charge on any specified payments or on payments of any specified class as if the moneys payable, subject to the deduction of any amount determined by the Commissioner under subsection four of this section, were salary or wages, and thereupon the charge shall be payable accordingly and the person by whom any such moneys are payable shall be deemed for the purposes of this Act to be the employer of the person entitled to receive the moneys. (2) The provisions of this section shall apply with respect to any moneys notwithstanding that those moneys may be in any way protected against assignment or charge. (3) The provisions of this section shall apply with respect to any payments whether or not they consist wholly or partly of income and whether or not the person entitled to receive the moneys is liable for payment of the charge. (4) For the purposes of this section the Commissioner may from time to time determine, on such basis as he thinks fit, what amount or proportion (if any) of the moneys comprised in any specified payment to which this section applies, or in any specified class of such payments, shall be regarded as expenditure incurred in the production of those moneys, and such

Deduction at source of charge on income included in certain payments. 1942,. No. 14, s. 13 1947, No. 6, s. 14(3)

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determination shall, subject to any further determination made by him, be final and conclusive. Any determination made by the Commissioner under this subsection may be at any time revoked or varied by him. (5) Where any money, although not actually paid, has been credited to or applied on account of any person entitled thereto, the money so credited or applied shall, for the purposes of this section, be deemed to have been paid when it was so credited or applied.

15, (1) In all cases where, in pursuance of or in intended or purported compliance with subsection two of section thirteen or section fourteen hereof, or any corresponding enactment heretofore in force, or any notice or requirement given or made by the Commissioner in pursuance or purported pursuance thereof, any moneys have been deducted by any person (whether before or after the. passing of this Act) from any moneys payable by that person to any other person, the moneys so deducted shall be deemed for all purposes to have been validly and lawfully deducted pursuant to section fourteen hereof. Without limiting the generality of the foregoing provision, it is hereby declared that no person other than the Commissioner shall have any remedy or right of action against any other person in respect of the moneys so deducted, except the remedies hereinafter conferred, and that the payment to the Commissioner of any moneys so deducted shall absolutely discharge the person making the deduction from any liability to any other person in respect of the moneys so deducted and paid. (2) Without limiting the provisions of subsection five of section fourteen hereof, it is hereby declared that for the purposes of that section and of this section all references to payments and to moneys payable shall be deemed to include any moneys paid or payable by one person as agent to another person as his principal. All references in this section to the payment of moneys to the Commissioner shall be deemed to include payment in accordance with regulation twelve of the Social Security Contribution Regulations 1939. (3) Notwithstanding anything hereinbefore contained, in any case where the Commissioner is satisfied that any moneys deducted as aforesaid (whether before or after the passing of this Act) have been deducted

Deduction and refund of charge on income included in certain payments. 1943, No. 2, s. 2 1947, No. 6, s. 14 (3), s. 16

Serial number 3939/13

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from moneys payable to a person who is exempt from the charge or who is not liable for the charge to the extent of the amount so deducted, the Commissioner may, upon application made by or on behalf of that person within four years after the date of the deduction, forthwith refund to him the amount so deducted or so much thereof as in the opinion of the Commissioner exceeds the amount of the charge for which that person is liable. (4) In any case where, by reason of the operation of either of the statutory provisions referred to in subsection one of this section, any moneys have been deducted as aforesaid from any moneys payable to any person in any income year, and all amounts so deducted, together with other moneys (if any) paid to the Commissioner on account of the charge on the income derived by that person in that income year, exceed the amount of the charge (if any) payable by him in respect of that income, the Commissioner shall, upon application made by or on behalf of that person within four years after the date of the deduction, refund to him the amount of the excess, or, if no charge is so payable, shall refund the whole of the amount so deducted.

16. (1) This section applies to every person in respect of whom the Commissioner is satisfied that his income derived during the year ended on the thirty-first day of July, nineteen hundred and thirty-one, consisted exclusively or principally of income other than salary or wages which was subject to the charge on such income imposed by the Unemployment Amendment Act, 1931. (2) Where on any date, whether before or after the passing of this Act, any person to whom this section applies has become liable pursuant to subsection two of section thirteen hereof to pay social security charge on income other than salary or wages in the same manner as if that income were salary or wages, or has commenced to derive income exclusively or principally from salary or wages, the Commissioner may reduce by such amount as appears to him to be just the instalments of social security charge payable by that person on income other than salary or wages derived before that date.

Adjusting liability for charge in. certain cases. 1940, No. 26, 5.4(2), (4) See 1931, No. 9

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17. (1) Where any salary, wages, or other income, though not actually paid, has been credited to or applied on account of any person entitled thereto, the amount so credited or applied shall, for the purposes of this section and sections eleven and thirteen hereof, be deemed to have been paid when it has been so credited or applied and the charge thereon shall be payable accordingly. (2) Except in cases where the amount deducted from any salary, wages, or other income in accordance with section eleven or section thirteen hereof is represented by social security stamps duly affixed and cancelled, the amount so deducted shall be deemed to be held in trust for the Crown, and shall be paid at the time and in the manner prescribed by regulations made for the purposes of this Act.

Charge on income which has been credited or applied. Deductions to be held in trust. 1938, No. 7, s. 118 (5), (6)

18. (1) For the purposes of this Act all moneys included in the assessable income of any serving employee by virtue of section one hundred and thirty-three of the Land and Income Tax Act, 1951, shall be deemed to be salary or wages, and the person paying any such moneys shall be deemed to be the employer of the serving employee. (2) The provisions of this section shall apply with respect to any moneys paid by any employer to any serving employee, notwithstanding that the legal relationship of employer and employee may not in fact exist between them at the time of payment.

Assessable income of serving employee deemed salary or wages. 1943, No. 2, 5.3(6), (8)

19. (1) Every employer or other person by whom any salary, wages, or other income is paid who fails to deduct the charge payable in respect thereof in accordance with the provisions of sections eleven, thirteen, and seventeen hereof shall be liable on summary conviction to a fine of twenty pounds. (2) Every person who knowlingly applies or permits to be applied the amount of any charge deducted, or any part thereof, for any purpose other than the payment of the charge commits an offence, and shall be liable on summary conviction to imprisonment for twelve months or to a fine of one hundred pounds. For the purposes of this subsection the charge shall be deemed to have been deducted if and when payment is made of the net amount of any salary, wages, or other income subject to the charge, and the amount deducted shall be deemed

Offences by employers. 1938, No. 7, s. 119

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to have been applied for a purpose other than the payment of the charge if payment of the charge is not duly denoted by the cancellation of stamps or if the amount of the charge is not duly paid: Provided that no person shall be convicted of an offence under this subsection if he satisfies the fJourt that the amount deducted by him has been accounted for, and that his failure to account therefor within the prescribed time was due to illness, accident, or other cause beyond his control and was not for the purpose of defrauding the revenue. (3) Every person who has committed an offence under subsection one of this section, or who, having deducted the charge, fails, within the prescribed time and in the prescribed manner, to affix and cancel the requisite stamps or to pay over the amount deducted to the propercollecting authority, shall, unless the Commissioner is satisfied that he has not been guilty of wilful neglect or default, be liable, without conviction, in addition to any other penalty to which he may be liable, to a penalty equal to ten per cent of the charge or part thereof in respect of which the offence is committed. (4) In any case where the charge deducted from any salary, wages, or other income as aforesaid, or any part thereof, is not held by the employer or other person by whom the deduction is made so as to be distinguishable from other moneys held by him, the amount of the charge or part thereof, as the case may be, and of any penalties incurred in respect thereof, shall, until payment thereof, be a charge on all the real and personal property of that person. (5) Every charge created by virtue of the last preceding subsection shall, save as hereinafter provided, have priority over all existing or subsequent mortgages, instruments by way of security, charges, assignments, or encumbrances howsoever created. Notwithstanding anything to the contrary in any other Act, if any property subject to a charge created by the last preceding subsection is also subject to a charge created bv that other Act, the charges shall rank equally with each other unless by virtue of that other Act the charge created thereby would be deferred to the charge created by the last preceding subsection.

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20. (1) The charge imposed by this Act in respect of income other than salary or wages (not being income to which the provisions of sections eleven, thirteen, and seventeen hereof apply) shall be due and payable by equal instalments on the first day of July and the first day of November in the year following the financial year for which such income was derived. (2) If at any time it appears to the Commissioner that any person who is liable for the charge in respect of the income derived by him for any financial year has failed to declare that income within the prescribed time, or has declared an amount of income less than the amount actually derived by him for that year, the Commissioner may fix a new date as the due date for the payment of any instalment of the charge or of any additional charge in respect of the income derived as aforesaid if he is satisfied that in failing as aforesaid to declare his income or the full amount of his income, as the case may be, the person concerned was not guilty of wilful neglect or default. (3) Every person who makes default for more than one month after the due date thereof in the payment of any instalment of the charge on income other than salary or wages, or, in the case of a person absent from New Zealand on the due date of any such instalment, who makes default in the payment of the instalment for more than one month after his return to New Zealand, commits an offence, and shall, except in cases to which the next succeeding section applies, be liable on conviction to a fine of five pounds, and shall also be liable, without conviction, to a penalty equal to ten per cent of the amount of the instalment or part thereof in respect of which default is made. Every such penalty shall be deemed part of the instalment in respect of which, it is imposed, and shall be recoverable accordingly.

Due dates of payment of charge on income other than salary or wages. 1938, No. 7, s. 120 1948, No. 78, s. 24

21. (1) If any person evades, or attempts to evade or does any act with intent to evade, or makes default in the performance of any dnty imposed npon him by this Act or any regulations made for the purposes of this Act with intent to evade, the liability for any sum properly payable by him as a charge on income other than salary or wages (which sum is hereinafter referred to as the deficient charge), he shall be liable on conviction

Penalties for wilful evasion of charge. 1938, No. 7, s. 121

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to a fine of fifty pounds, and shall also be chargeable without conviction with an additional charge (hereinafter called the penal charge) equal to treble the amount of the deficient charge. (2) The penal charge shall for all purposes be deemed to be of the same nature as the deficient charge, and shall be recoverable accordingly. (3) The penal charge shall be assessed by the Commissioner in the same manner, so far as may be, as the deficient charge but separately therefrom. (4) Any assessment of the penal charge shall be subject to objection on the ground that the person so assessed is not chargeable therewith or on the ground that the amount so assessed is excessive. Every such objection shall be heard and determined in the manner prescribed by Part 111 of the Land and Income Tax Act, 1951, in its application to this Act. (5) An assessment of the penal charge may be made and the charge so assessed shall be recoverable at any time whether before or after the deficient charge has been assessed or has been paid. (6) The assessment of any penal charge may from time to time be amended by the Commissioner. (7) No assessment of the penal charge shall be made or increased at any time after the expiration of four years from the end of the financial year in which the declaration of income other than salary or wages was required to be made in accordance with section twentyfive hereof.

22. (1) Every employer or other person by whom any salary, wages, or other income is paid who fails to deduct the charge payable in respect thereof in accordance with the provisions of this Act shall be chargeable by way of penalty, in addition to any other penalty to which he may be liable, with an additional charge (hereinafter referred to as the penal charge) equal to treble the amount of the charge not deducted (hereinafter referred to as the deficient charge). (2) Every person who knowingly applies or permits to be applied the amount of any charge deducted, or any part thereof, for any purpose other than the payment of the charge shall be chargeable by way of penalty, in addition to any other penalty to which he may be liable, with an additional charge (hereinafter referred to as the

Penal charge in ease of evasion of charge on salary or wages. 1946, No. 41, s. 12

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penal charge) equal to treble the amount of the charge or part thereof so applied (hereinafter referred to as the deficient charge). For the purposes of this subsection the charge shall be deemed to have been deducted if and when payment is made of the net amount of any salary, wages, or other income subject to the charge, and the amount deducted shall be deemed to have been applied for a purpose other than the payment of the charge if payment of the charge is not duly denoted by the cancellation of stamps or if the amount of the charge is not duly paid: Provided that no person shall be chargeable with the penal charge under this subsection if he satisfies the Commissioner that the amount deducted by him has been accounted for, and that his failure to account therefor within the prescribed time was due to illness, accident, or other cause beyond his control and was not for the purpose of defrauding the revenue. (3) The foregoing provisions of this section shall be deemed to have come into force on the first day of April, nineteen hundred and thirty-nine (being the date of coming into force of Part IV of the Social Security Act, 1938). (4) Subsections two to six of section twenty-one hereof shall apply with respect to the penal charge imposed under this section. (5) The assessment or recovery of the penal charge in respect of any deficient charge shall not be in any manner barred or affected by the fact that the person chargeable has at any time after the twelfth day of October, nineteen hundred and forty-six (being the date of the passing of the Finance Act (No. 2), 1946), been convicted of an offence under subsection one or subsection two of section one hundred and nineteen of the Social Security Act, 1938, or under subsection one or subsection two of section nineteen hereof in respect of that deficient charge. (6) No assessment of the penal charge shall be made or increased at any time after the expiration of four years from the end of the financial year in which the deficient charge was required by this Act to be deducted. (7) For the purposes of this section the expression " salary, wages, or other income " shall be deemed to include all payments in respect of which charge is or was

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payable under section thirteen of the Finance Act (No. 2), 1942, or section two of the Finance Act, 1943, or section fourteen or section fifteen hereof. (8) Section two hundred and twenty-nine of the Land and Income Tax Act, 1951 (which relates to the publication of the names of tax evaders), shall hereafter be read as if the reference in paragraph (c) of subsection one of that section to penal charge under section one hundred and twenty-one of the Social Security Act, 1938, included a reference to penal charge under the last preceding section or under this section.

See 1942, No. 14 See 1943, No. 2

23. (1) Where at any time after the first day of April, nineteen hundred and thirty-nine (being the date of commencement of Part IV of the Social Security Act, 1938), any person becomes liable to the charge on income other than salary or wages, his liability in respect of that charge shall be limited to instalments of the charge that may become due after the date of the commencement of his liability. (2) If any person who is liable for the charge on income other than salary or wages ceases to be ordinarily resident in New Zealand he shall be liable for all instalments that would become payable in respect of such income derived by him up to the date of his so ceasing to be resident in New Zealand, and all such instalments not theretofore due shall become due and payable on the day preceding the date on which he so ceases to be resident in New Zealand, and may be recovered accordingly. (3) In the event of the death of any person liable for the charge on income other than salary or wages, or who would have been so liable if he had not died, his personal representatives shall be liable for every instalment of the charge due on the date of his death and for every instalment that, if he had not died, would thereafter have become payable in respect of income derived by him up to the date of his death. Every such instalment not due on the date of death shall be deemed to have become due and payable on that date and may be recovered accordingly.

Commencement and termination of liability for charge on income other than salary or wages. 1938, No. 7, s. 122

> *J 24. (1) This section applies to every person to whom section sixteen hereof applies. (2) Where at any time after the eleventh day of October, nineteen hundred and forty (being the date of the passing of the Finance Act (No. 3), 1940), any person

Adjusting liability for charge in certain cases. 1940. No. 26, 8.4(3)

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to whom this section applies (other than a person in whose favour the Commissioner has exercised the power conferred by section sixteen hereof) ceases to be ordinarily resident in New Zealand or dies, the liability of that person or of his personal representatives for social security charge in respect of income other than salary or wages derived by him shall, notwithstanding anything to the contrary in subsections two and three of section twenty-three hereof, be limited to liability for every instalment of the charge that becomes due and payable before the day preceding the date of his ceasing to be ordinarily resident in New Zealand or that becomes due and payable before the date of his death, as the case may be.

25. (1) For the purposes of the assessment and levy of the charge on income other than salary or wages every person, whether liable for the charge or not, shall in each financial year make to the Commissioner within the prescribed time such declaration or declarations as may be prescribed. (2) If any person makes default in furnishing any declaration required by the last preceding subsection, or if the Commissioner is not satisfied with any declaration made under that subsection, the Commissioner may make an assessment of the amount on which in his opinion the charge ought to be levied, and of the amount of the charge, and the person concerned shall be liable to pay the charge so assessed save so far as he satisfies the Commissioner that the assessment is excessive or that the charge is not payable by him. (3) As soon as conveniently may be after an assessment is made under the last preceding subsection in respect of any person, the Commissioner shall cause notice of the assessment to be given to that person. The omission to give any such notice shall not invalidate the assessment or in any manner affect the operation thereof. (4) Any person who has been assessed in accordance with subsection two of this section may object to the assessment by delivering or posting to the Commissioner a written notice of objection stating shortly the grounds of his objection within such time as may be specified in

Assessment of charge on. income other than salary or wages. 1938, No. 7, s. 123

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that behalf in the notice of assessment, not being less than twenty-one days after the date on which that notice of assessment is given. (5) No notice of objection given after the time so specified shall be of any force or effect unless the Commissioner in his discretion accepts it and gives notice to the objector accordingly.

26. (1) Every trustee who for any year derives any income which is not also income derived by a beneficiary entitled in possession to the receipt thereof under the trust during the same income year shall be required to make a declaration or declarations in respect of such income in accordance with the requirements of the last preceding section, and except as provided in subsection three hereof, shall be liable for the payment of the charge thereon. (2) Where any income in respect of which the trustee has paid the charge in accordance with the last preceding subsection is at any time thereafter paid to the beneficiary, the beneficiary shall not be liable for the payment of any charge in respect thereof, and the Commissioner shall make all such adjustments in the assessment of the beneficiary as may be necessary to give effect to this subsection. (3) Notwithstanding anything in the foregoing provisions of this section, no charge shall be payable by a trustee on any income in respect of which the Commissioner is satisfied that it is held by the trustee for a beneficiary whose interest therein is vested and who would not be personally liable for the charge on that income if it had been paid to him in the year in which it was derived by the trustee: Provided that the exemption provided for by this subsection shall not apply with respect to any income derived by a trustee and held by him as capital for any beneficiary. (4) If and so far as the income derived by any trustee is also income derived by a beneficiary entitled in possession to the receipt thereof under the trust during the same income year, the trustee shall in respect thereof be deemed to be the agent of that beneficiary, and shall be required to make a declaration or declarations in respect of that income in accordance with the

Special provisions as to trustees. 1938, No. 7, s. 124 1939, No. 31, s. 20 1941, No. 4, s. 24

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requirements of the last preceding section, and except as provided in subsection six of this section shall be liable for the payment of the charge thereon accordingly, and all the provisions of the Land and Income Tax Act, 1951, as to agents shall, so far as applicable, apply accordingly. (5) For the purposes of the last preceding subsection income derived by a beneficiary from an annuity or other payment under any trust shall be deemed to be also income derived by the trustee during the same income year, notwithstanding that the annuity or other payment may be payable in whole or in part out of moneys held by the trustee as capital. (6) Notwithstanding anything in subsection four of this section, no charge shall be payable by a trustee in accordance with that subsection on any income if the Commissioner is satisfied that the beneficiary is not personally liable for the charge on that income.

27. (1) Except as provided in the next succeeding subsection, every company for the time being resident in New Zealand shall be liable for the charge on income imposed by this Act. A company shall be deemed to be resident in New Zealand for the purposes of this section if it is resident in New Zealand for the purposes of Part VI of the Land and Income Tax Act, 1951. (2) This section shall not apply with respect to any company of a class that is for the time being exempted by the Governor-Geiieral in Council from the operation of this section, or to any company that is for the time being assessable for income tax Under section one hundred and forty or section one hundred and forty-taw or section one hundred and forty-three of the Land and Income Tax Act, 1951. (3) The income in respect of which a company is liable in accordance with this section is herein referred to as the " chargeable income " of the company. Notwithstanding anything in section three hereof, the chargeable income of any company shall not include any interest to which the provisions of section one hundred and fortyseven of the Land and Income Tax Act, 1951, apply (being interest paid or payable by the company and treated for the purposes of that section as if it were income of the company).

Liabilities of companies for charge. 1938, No. 7, s. 125 1940, No. 5, 5.4(1) 1941, No. 18, s. 3 (10) 1946, No. 38, s. 3 1947, No. 45, s. 12

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(4) Notwithstanding anything to the contrary in the foregoing provisions of this Act, the charge payable by any company on its chargeable income for any year shall be due and payable on such day or days as the Governor-General in Council determines in that behalf. (5) Where the Commissioner is satisfied that any dividend declared on or before the thirty-first day of March, nineteen hundred and thirty-nine, by any company has been paid in whole or in part out of the income of the company for the year ending on that date, he shall reduce the chargeable income of the company for that year by the amount of such dividend or part thereof, as the case may be. (6) If in any year it appears to the Commissioner that the sum of (i) the dividends declared by a company since the thirty-first day of March, nineteen hundred and thirty-nine, and (ii) the total amount which became due and payable by the company since that date in respect of the charge imposed by this Act or in respect of income tax, and (iii) any amounts deducted from the chargeable income of the company pursuant to the last preceding subsection exceeds the total income of the company for all years subsequent to the year ended on the thirty-first day of March, nineteen hundred and thirty-eight (including any income that is not chargeable under this Act), after deducting any loss which has been deducted under section thirty-two hereof, the amount of the excess shall be deemed to be chargeable income of the company for that year, and the company shall be liable for the charge thereon accordingly. (7) Except as provided in this section, all the provisions of this Act shall, so far as applicable, apply with respect to companies that for the time being are subject to this section in the same manner as they apply with respect to persons other than companies.

Company liable to charge may adjust dividends payable to preference shareholders. 1939, No. 31, s. 21 1947, No. 6, 5.13 (1)

28. (1) Any company that has paid or is liable to pay a charge on its income in accordance with the last preceding section, may, notwithstanding anything to the contrary in any contract with any shareholder or in the terms on which any of its shares were issued, reduce the amount of the dividends payable to any shareholder by an amount not exceeding one penny for every sum of thirteen and one third pence or part thereof included in the amount of his dividends.

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(2) Where any company to which this section applies has before the twenty-ninth day of September, nineteen hundred and thirty-nine (being the date of the passing of the Social Security Amendment Act, 1939), paid to any shareholder dividends of an amount in excess of the amount that it would have been required to pay to him if this section had been passed before such dividends were paid, it may recover the amount of the excess as a debt due to the company from the person to whom the dividends were paid, or it may make any necessary adjustments by a reduction of any dividends that may be paid or payable to the shareholder after the passing of this Act: Provided that for the purposes of the Limitation Act, 1950, the right conferred by this section shall be deemed to have been conferred on the said twenty-ninth day of September, nineteen hundred and thirty-nine.

29. (1) For the purposes of this section, the expression " non-resident company " means a company that is not resident in New Zealand for the purposes of section twenty-seven hereof. (2) Except as provided in the next succeeding subsection, every non-resident company shall, in respect of the income derived by it from New Zealand for any year, be liable for the charge on income imposed by this Act. (3) This section shall not apply with respect to any company of a class that is for the time being exempted by the Governor-General in Council from the operation of this section, or to any company that is for the time being assessable for income tax under section one hundred and forty or section one hundred and forty-two, or section one hundred and forty-three of the Land and Income Tax Act, 1951. (4) The provisions of subsections three, four, and seven of section twenty-seven hereof (relating to companies resident in New Zealand) shall apply with respect to non-resident companies in the same manner as they apply with respect to companies resident in New Zealand. (5) Dividends derived from a non-resident company liable under this section to a charge on income and declared by the company at any time after the thirty-first day of March, nineteen hundred and forty-one, shall be

Liability of non-resident companies for charge. 1940, No. 5, s. 2

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exempt from the charge imposed by this Act if and so far as the Commissioner is satisfied that they have been paid out of income derived by the company from New Zealand after the thirty-first day of March, nineteen hundred and forty.

Liability for charge of certain public authorities. 1940, No. 5, 5.3

30. (1) Every public authority within the meaning of the Land and Income Tax Act, 1951, that is for the time being liable for income tax shall be liable for the charge on income imposed by this Act in the same manner in all respects as if it were a company (2) All moneys payable by any public authority on account of the said charge shall be paid without further appropriation than this section.

31. (1) For the purposes of this section the term " banking company " means a company that before the thirteenth day of October, nineteen hundred and fortyone, was assessable for income tax under section nine of the Land and Income Tax Amendment Act, 1932-33. (2) Subject to the provisions of this section, every banking company shall, in respect of income derived by it during the income year ended on the thirty-first day of March, nineteen hundred and forty-one, or during any subsequent income year, be assessable and liable for social security charge in the same manner as if it were a company other than a banking company. (3) For the purposes of this section and section twenty-seven hereof, a banking company shall be deemed to be resident in New Zealand, if its head office is in New Zealand, but not otherwise. (4) In the application of this Act to any banking company the following provisions shall apply:— (a) Subsection five of section twenty-seven hereof shall be construed as if the references to the thirty-first day of March, nineteen hundred and thirty-nine, were references to the thirty-first day of March, nineteen hundred and forty-one, and as if the word " chargeable " were inserted before the words " income of the company for the year ending on that date '':

Liability of banking companies for charge. 1941, No. 18, 5.3

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(b) Subsection six of section twenty-seven hereof shall be construed as if the references to the thirty-first day of March, nineteen hundred and thirty-nine, were references to the thirty-first day of March, nineteen hundred and forty-one, and as if the reference to the thirty-first day of March, nineteen hundred and thirty-eight, were a reference to the thirty-first day of March, nineteen hundred and forty. (5) Dividends derived from a banking company that is resident in New Zealand and declared by the company at any time after the thirty-first day of March, nineteen hundred and forty-one, shall be exempt from social security charge. Dividends derived from a banking company that is not resident in New Zealand and declared by the company at any time after the thirtyfirst day of March, nineteen hundred and forty-one, shall be exempt from social security charge if and so far as the Commissioner is satisfied that they have been paid out of income derived by the company from New Zealand after the thirty-first day of March, nineteen hundred and forty.

32. Notwithstanding anything to the contrary in this Act, if any person who is liable thereunder to a charge on income other than salary or wages satisfies the Commissioner that in the year commencing on the first day of April, nineteen hundred and thirty-eight, or in any subsequent year, he has incurred a loss, the Commissioner, in assessing the amount of the charge payable by that person on any income other than salary or wages, shall, so far as may be, deduct such loss from such income for the three following years: Provided that any relief under this section shall be given so far as possible from the first assessment of the charge within the aforesaid period of three years, and, so far as it cannot then be given, shall be given from the next assessment, and so on: Provided also that where, if a profit had been made from the transaction in which the loss was incurred, the amount of the profit would not have been subject to the charge imposed on income by this Act, no relief shall be given under this section in respect of that loss.

In computing charge Commissioner may set off losses against subsequent income. 1938, No. 7, s. 126 1945, No. 45, s. 18

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Collection and Recovery of Social Security Charge 33. (1) For the purpose of denoting the payment of the social security charge, but for no other purpose whatsoever, the Minister of Finance may cause to be created and sold special stamps, to be designated social security stamps, of such denominations of value as he thinks fit. (2) The creation, custody, and disposition of such stamps shall, subject to the foregoing provisions of this section, be in accordance with regulations, or, in default of such regulations, shall be in accordance with the directions of the Minister of Finance.

Social security stamps. 1938, No. 7, s. 128

34. (1) Subject to any regulations that may be made for the purposes of this Act, payment of the social security charge shall be denoted by the cancellation in the prescribed manner of social security stamps of the appropriate value, and not otherwise. (2) The Governor-General in Council, by regulations made for the purposes of this Act, may prescribe that in cases to be therein defined any moneys payable in respect of the social security charge may be paid in cash to the Commissioner or to any other person authorized to give a valid receipt therefor.

Mode of payment of social securitycharge. 1938, No. 7, s. 129

35. (1) Any part of the social security charge that is not paid on the due date and all penalties incurred in respect thereof shall constitute a debt due and payable to the Crown, and shall be recoverable in any Court of competent jurisdiction by the Commissioner on behalf of the Crown by suit in his official name. (2) Where any charge on salary or wages has not been deducted from the salary or wages in respect of which it is payable, such charge, with any penalties incurred in respect thereof, may be recovered either from the employer or from the person to whom the salary or wages were paid. Where any such charge has been deducted from the salary or wages in respect of which it is payable, such charge, with any penalties incurred in respect thereof, may be recovered only from the employer. (3) Where any charge recoverable in accordance with the foregoing provisions of this section from the person who received any salary or wages is in fact paid by the employer, the amount so paid may be recovered by the employer from the person who received the salary or wages in respect of which the charge was paid.

Recovery of social security charge. 1935, No. 7, s. 130

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(4) The obligation to pay any charge and the right of the Commissioner to receive and recover any charge shall not be suspended by any objection under any of the provisions of this Act; but if the objector succeeds the amount (if any) of the charge received by the Commissioner in excess of the amount which was properly payable shall forthwith be repaid to him.

36. If in any proceedings against any person for failure to pay any instalment of the social security charge within the time limited by the foregoing proVisions of this Act the defendant alleges that he is exempt from the obligation to pay the instalment, or that he has paid the instalment, the burden of proving such exemption or payment shall be on him.

Burden of proving exemption. 1938, No. 7 s. 131

General 37. (1) Notwithstanding anything to the contrary in section fifty of the Justices of the Peace Act, 1927, an information for any offence in respect of this Act may be laid at any time within four years after the end of the financial year in which the offence was committed. (2) All proceedings for offences against this Act shall be taken before a Stipendiary Magistrate.

Proceedings for offences. 1938, No 7, s. 137

38. Every person who commits an offence under this Act or under any regulations made for the purposes of this Act for which no specific penalty is provided elsewhere than in this section, is liable to a fine of ten pounds.

General penalty for offences. 1938, No 7, s. 138

39. (1) No stamp duty shall be payable on any statutory declaration, or on any agreement, receipt, or other instrument made, given, or executed for any of the purposes of this Act. (2) Any declaration required for the purposes of this Act may be made before any person authorized to receive declarations in accordance with section three hundred and one of the Justices of the Peace Act, 1927, or before any other person authorized in that behalf by or in accordance with regulations made under this Act.

Exemptions from stamp duty. 1938, No 7, s. 139

40. (1) The Governor-General may from time to time, by Order in Council, make all such regulations as in his opinion are necessary for the purpose of giving full effect to this Act.

Regulations. 1938, No 7, s. 140 1941, No. 14, s. 11'

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(2) All regulations purporting to be made under the authority of this section shall, until revoked, have the force of law as if they were enacted in this Act. (3) All regulations made under the authority of this section shall be laid before Parliament within fourteen days after the making thereof if Parliament is then in session, and, if not, shall be so laid before Parliament within fourteen days after the commencement of the next ensuing session. (4) Without limiting the general power to make regulations conferred on the Governor-General by the preceding subsections of this section, it is hereby declared that regulations may be made under those subsections for all or any of the following purposes:— {a) Preventing abuses of the provisions of this Act: (b) Prescribing punishments for offences against the regulations and penalties for breaches thereof: (e) Generally for giving full effect to the provisions of this Act and providing for the due administration thereof.

Annual reports. 1938, No 7, s. 141

41. (1) The Minister of Finance shall, as soon as practicable after the close of each financial year, cause to be prepared a report of the operations carried out under this Act during the financial year. (2) Every such report shall be laid before Parliament within fourteen days after it has been received by the Minister if Parliament is then in session, and in every other case shall be laid before Parliament within fourteen days after the commencement of the next ensuing session.

Repeals, Savings, and Amendments 42. (1) The enactments specified in the Schedule hereto are hereby repealed. (2) All Orders in Council, authorizations of the Minister of Finance, assessments, determinations, exemptions, and other decisions of the Commissioner, all charges and priorities, all deductions, all declarations and objections, all appointments, and generally all acts of authority and acts of parties, and all periods of time, which originated under any of the said enactments and are subsisting or in force at the coming into force of this Act, shall enure for the purposes of this Act,

Repeals and Barings. 1938, No 7, s. 135

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and accordingly shall, where necessary, be deemed to have so originated, but not so as to extend any period of time that began to run before the coming into force of this Act. (3) Nothing in this Act shall relieve any person from any liability that has accrued before the coming into force of this Act to which he would have been subject if this Act had not been passed or increase any such accrued liability. (4) All social security charges that have become due and payable under any of the said enactments, and all penalties that have been incurred thereunder prior to the coming into force of this Act, may be recovered and enforced as if they were payable or had been incurred under this Act. (5) All proceedings in respect of offences committed or alleged to be committed against any enactment hereby repealed before the coming into force of this Act may be instituted or continued as if this Act had not been passed. (6) All matters and proceedings commenced under any of the said enactments and pending or in progress at the coming into force of this Act may be continued, completed, and enforced under that enactment or under this Act,

43. The Social Security Act, 1938, is hereby amended as follows: — (a) By omitting from paragraph (a) of section one hundred and five the words " social security contribution payable under this Part of this Act", and substituting the words " social security charge ": (b) By omitting from paragraph (b) of section one hundred and six the words " social security contribution imposed by this Part of this Act ", and substituting the words " social security charge (c) By omitting from subsection one of section one hundred and thirty-seven the words " in respect of Part IV of this Act may be laid at any time within four years after the end of the financial year in which the offence was committed, and an information for any other offence ".

Amendments to Social SecurityAct, 1938.

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SCHEDULE Enactments Repealed 1938, No. 7 The Social Security Act, 1938: Sections 108 to 113, 118 to 131, and 135. 1939, No. 31— The Social Security Amendment Act, 1939: Sections 16 to 22. 1939, No. 34 The Land and Income Tax Amendment Act, 1939: Sections 1 and 2 and subsection (4) of section 14. 1940, No, 5 The Social Security Amendment Act, 1940: Sections 2to 5. 1940, No. 6 The Finance Act, 1940: Subsections (2) and (3) of section 12. 1940, No. 26 The Finance Act (No. 3), 1940: Section 4. 1941, No. 4 The Finance Act, 1941: Sections 24 and 25. 1941, No. 18— The Land and Income Tax Amendment Act, 1941: Subsections (1) to (3), (6) (7) and (10) of section 3. 1942, No. 14LThe Finance Act (No. 2), 1942: Sections 13 and 14. 1943, No. 2 ; The Finance Act, 1943: Section 2 and subsections (6) and (8) of section 3. 1943, No. 19— The Social Security Amendment Act, 1943: Section 29. 1945, No. 45 The Finance Act (No. 2), 1945: Sections 18 and 23. 1946, No. 38— The Land and Income Tax Amendment Act, 1946: Subsection (2) of section 3. 1946, No. 41— j The Finance Act (No. 2), 1946: Section 12. 1947, No. 6 The Finance Act, 1947: Sections 13, 15, 16, and 17, and subsection (2) of section 11. 1947, No. 45 The Finance Act (No. 2) 1947: Sections 9 and 12. 1948, No. 78— The Finance Act (No. 2), 1948: Section 24. 1950, No. 49 The Social Security Amendment Act, 1950: Section 24.

Schedule. Section 42 (1)

By Authority : R. E. Owen, Government Printer, Wellington.—l9sl. Price ss.]

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