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Income Tax Act 2007

Core provisions - Calculating and satisfying income tax liabilities

BC 7: Income tax liability of person with schedular income

You could also call this:

"Paying income tax on schedular income"

Illustration for Income Tax Act 2007

You have income tax to pay if you earn schedular income. Your income tax is the total of two things: your schedular income tax and the tax you would pay if you had no schedular income. The schedular income tax is calculated differently depending on how many kinds of schedular income you have. You calculate your schedular income tax by working out what tax you would pay if that was your only income. If you have more than one kind of schedular income, you add up the tax for each kind. For a multi-rate PIE, the income tax is determined under subpart HM. If you invest in a multi-rate PIE, your schedular income tax is calculated under section HM 36B to adjust your income tax. This adjustment is made to ensure you pay the right amount of tax. You need to follow the rules to calculate your income tax correctly.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512351.

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Topics:
Money and consumer rights > Taxes
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"How to calculate the income tax you owe if you file a tax return"

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"How tax credits are used to pay your income tax"

Part BCore provisions
Calculating and satisfying income tax liabilities

BC 7Income tax liability of person with schedular income

  1. The income tax liability for a tax year of a person who has schedular income for the year is the total of—

  2. their schedular income tax liability for the year calculated under subsection (2) or (3); and
    1. the amount that would be their income tax liability for the year if they had no schedular income.

      1. If a person has 1 kind of schedular income for a tax year, their schedular income tax liability for the year is the amount that would be the income tax liability for the year if their only income for the year were that schedular income.

      2. If a person has more than 1 kind of schedular income for a tax year, their schedular income tax liability for the year is the total of the amounts calculated for each kind of schedular income.

      3. The income tax liability for a tax year of a multi-rate PIE is determined under subpart HM (Portfolio investment entities).

      4. The schedular income tax liability of a natural person investor in a multi-rate PIE, when the rate of tax applied for the year is not equal to the investor’s prescribed investor rate for the year, is calculated under section HM 36B (Calculating PIE schedular income adjustments for natural person investors) to provide an adjustment to the amount of the person’s income tax liability referred to in subsection (1)(b).

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      Notes
      • Section BC 7(4) heading: added, on (applying for the 2010–11 and later income years), by section 4(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
      • Section BC 7(4): added, on (applying for the 2010–11 and later income years), by section 4(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
      • Section BC 7(5) heading: inserted, on , by section 83(1) (and see section 83(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
      • Section BC 7(5): inserted, on , by section 83(1) (and see section 83(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
      • Section BC 7(5): amended (with effect on 1 April 2020), on , by section 5(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
      • Section BC 7 list of defined terms multi-rate PIE: inserted, on , by section 4(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
      • Section BC 7 list of defined terms prescribed investor rate: inserted (with effect on 1 April 2020), on , by section 5(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
      • Flowchart B4: amended, on , by section 5 (and see section 3 for application) of the Taxation (Research and Development Tax Credits) Act 2019 (2019 No 15).