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New Zealand law explained for everyone

Income Tax Act 2007

Income - Income from equity

CD 17: Credit transfer notice

You could also call this:

“How to notify the lender about dividends received on borrowed shares”

When you borrow shares from someone under a share-lending arrangement, you might get money from those shares called a dividend. This dividend might come with something extra called an imputation credit. If you get this kind of dividend and you tell the person you borrowed the shares from about it (by giving them a credit transfer notice), a few things happen:

The dividend you get doesn’t include the imputation credit. It’s like you’re only getting part of what the shares earned.

The person you borrowed the shares from (called the share supplier) gets to count the imputation credit as income. This happens when you give them the credit transfer notice.

Remember, this only applies when you borrow shares and then get a dividend with an imputation credit, and you tell the share supplier about it with a credit transfer notice.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512580.

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Money and consumer rights > Taxes
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Part C Income
Income from equity

CD 17Credit transfer notice

  1. This section applies when a share user under a share-lending arrangement—

  2. derives a dividend for the original share, with an imputation credit attached; and
    1. issues a credit transfer notice for the dividend.

      1. The dividend derived by the share user does not include the amount of the imputation credit.

      2. The amount of the imputation credit is income derived by the share supplier when the credit transfer notice is issued.

      3. Repealed
      Compare
      Notes
      • Section CD 17(4) heading: repealed, on , pursuant to section 19(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section CD 17(4): repealed, on , by section 19(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section CD 17 list of defined terms FDP credit: repealed, on , by section 19(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).