25 JUNE NEW ZEALAND GAZETTE 2175

sections 64E (1) (a), 64E (1) (f), and 64E (6) of the Income Tax Act 1976.

(2) Determination G17A: Discounted Value of Amounts Payable in Relation to a Deferred Property Settlement Denominated in New Zealand Currency is hereby rescinded with effect from the day on which this determination is signed.

3. Scope of Determination—(1) This determination shall apply to any deferred property settlement in relation to which a person is a holder or issuer, but shall not apply—

(a) To any Deferred Property Settlement where any amount Payable (other than the property that is the subject of the Deferred Property Settlement) is not denominated in New Zealand dollars; or

(b) To any Deferred Property Settlement where more than 20% of the amounts Payable is required to be paid more than 31 days prior to the Transfer Date.

4. Principle—(1) The discounted value of amounts Payable for the Specified Property is calculated as at the Transfer Date using—

(a) The Specified Rate; and

(b) Present value calculation Method A provided in subclause 6 (2) of Determination G10B: Present Value Calculation Methods, or an alternative method producing not materially different results.

(2) The discounted value of the amounts Payable for the Specified Property enables the acquisition price for a Deferred Settlement to be ascertained for the purposes of determining income derived or expenditure incurred in any period and the base price adjustment.

(3) Where any amounts Payable or the dates on which any amounts are Payable are not known with certainty reasonable estimates of the unknown variables must be made to enable an estimate of income derived or expenditure incurred in any income year.

5. Interpretation—(1) In this determination, unless the context otherwise requires—

Expressions used have the same meanings as in the Act and where a word or expression is given a particular meaning for the purposes of sections 64A to 64M of the Act it shall have the same meaning as in the said sections 64A to 64M:

“The Act” means the Income Tax Act 1976;

“Bank Bill” means an order to Pay, denominated in New Zealand currency and drawn upon and accepted by a person who is a registered bank for the purposes of the Reserve Bank Act, 1989;

“Credit Term” means the period commencing on the day after the Transfer Date and ending on the day on which the Final Payment is required to be made;

“Deferred Property Settlement” means an agreement for the sale and purchase of property or a specified option under which any amount is payable after the date on which the first right in the Specified Property is transferred;

“Final Payment” in relation to a Deferred Property Settlement means the last Payment required to be made by the issuer of a Deferred Property Settlement under the agreement, other than any amount that is not material to the total value of consideration required to be given by the issuer under the financial arrangement;

“Paid”, in relation to any amount Paid to or Paid by any person, includes distributed, credited, or dealt with in the interests of or on behalf of or to the order of the person, and, in relation to any amount, “Pay”, “Payable” and “Payment” have corresponding meanings;

“Specified Property” in relation to a Deferred Property Settlement means the property that is the subject of the Deferred Property Settlement;

“Specified Rate” at any date shall be calculated pursuant to Determination G23: Specified Rate;

“Transfer Date” in relation to a Deferred Property Settlement means the day on which the first right in the Specified Property is transferred.

(2) Any reference in this determination to another determination made by the Commissioner shall be construed as including a reference to any fresh determination made by the Commissioner to vary, rescind, restrict, or extend that determination.

(3) For convenience, words and phrases defined in this determination are indicated by initial capital letters, but the absence of a capital letter shall not alone imply that the word or phrase is used with a meaning different from that given by its definition.

6. Method—

CALCULATING THE ACQUISITION PRICE FOR THE BASE PRICE ADJUSTMENT

(1) For the purposes of subparagraph (ii) of the definition of “w” in section 64A (1) (c) of the Act, the discounted value of the amounts Payable for the Specified Property in relation to any person shall be calculated by summing—

(a) Every amount Payable to or, as the case may be, by the person for the Specified Property on or before the Transfer Date; and

(b) The present value as at the Transfer Date of amounts Payable to or, as the case may be, by the person for the Specified Property after the Transfer Date.

Where the amounts Payable and the dates those amounts are Payable are not known at the first balance date after the Transfer Date, the acquisition price shall be calculated for the purposes of the base price adjustment when the financial arrangement matures.

(2) For the purposes of this determination, the present value as at the Transfer Date of the amounts Payable shall be calculated, subject to subclause (3) of this clause, using Method A provided in clause 6(2) of Determination G10B: Present Value Calculation Methods, or an alternative method producing not materially different results.

(3) For the purposes of subclause (2) of this clause the annual rate of interest at which the present value of the amounts payable is required to be calculated shall be the Specified Rate determined as at the Transfer Date of the Specified Property and according to Determination G23: Specified Rate.

(4) The present value of the amounts Payable together with any deposit or amounts Paid on or before the Transfer Date is the amount “w” to be used to calculate the core acquisition price in accordance with section 64BA (1) of the Act.

(5) The core acquisition price is used to determine the acquisition price of a Deferred Property Settlement in accordance with section 64BA (2) or (3) of the Act. The acquisition price used will be used as variable “b” of the base price adjustment.

CALCULATING THE PRESENT VALUE OF THE AMOUNTS PAYABLE FOR THE PURPOSES OF DETERMINING INCOME DERIVED OR EXPENDITURE INCURRED DURING THE TERM OF A DEFERRED PROPERTY SETTLEMENT

(6) Where the amounts Payable and the dates on which those amounts are Payable are not known by the first balance date after the Transfer Date the income derived or expenditure incurred in relation to a Deferred Property Settlement shall be calculated as if the value of the Specified Property were equal to the core acquisition price calculated in accordance with the Act and subclauses (1) to (5) of this clause using the yield to maturity method or an alternative method producing not materially different results.

(7) Where the amounts Payable and the dates on which those