Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Income from equity

CD 54: Replacement payments

You could also call this:

“Payments received for transferred shares are taxable income”

If you take part in a returning share transfer, you might receive a replacement payment. When you get this payment, it counts as income for you. This means you need to include it when you calculate your total income for tax purposes. The payment becomes income at the moment it is paid to you, not before or after.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512775.

Topics:
Money and consumer rights > Taxes
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CD 53: Prevention of double taxation of share cancellation dividends, or

“Rules to avoid being taxed twice when a company buys back your shares”

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CE 1: Amounts derived in connection with employment, or

“Income you must include from your job or service”

Part C Income
Income from equity

CD 54Replacement payments

  1. The amount of a replacement payment derived by a person under a returning share transfer is income of the person when it is paid to the person.

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