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Income Tax Act 2007

Income - Income from equity

CD 4: Transfers of company value generally

You could also call this:

“Rules for when a company gives value to shareholders”

When a company gives something of value to a person, it’s called a dividend if two things are true. First, the reason for giving this value must be because the person owns shares in the company. You can find more details about this in section CD 6. Second, the transfer must not fall under any of the exceptions listed in sections CD 22 to CD 37.

If a transfer meets these conditions and is considered a dividend, you can find out how much the dividend is worth by looking at sections CD 38 to CD 42. These sections explain how to calculate the amount of the dividend.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512548.

Topics:
Money and consumer rights > Taxes
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CD 3: Meaning of dividend, or

“What counts as a dividend for tax purposes”

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CD 5: What is a transfer of company value?, or

“A company gives something valuable to someone, which may be more than what they receive in return”

Part C Income
Income from equity

CD 4Transfers of company value generally

  1. A transfer of company value from a company to a person is a dividend if—

  2. the cause of the transfer is a shareholding in the company, as described in section CD 6; and
    1. none of the exclusions in sections CD 22 to CD 37 applies to the transfer.

      1. Sections CD 38 to CD 42 apply for the purposes of calculating the amount of the dividend.

      Compare
      Notes
      • Section CD 4 heading: amended, on , by section 88(1) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
      • Section CD 4(1) heading: amended, on , by section 88(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
      • Section CD 4(1): amended, on , by section 88(3) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
      • Section CD 4 list of defined terms transfer of company value: inserted, on , by section 88(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
      • Section CD 4 list of defined terms transfer of value: repealed, on , by section 88(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).