Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Recharacterisation of certain transactions - Imputation groups of companies

FN 11: Company choosing to leave imputation group

You could also call this:

“How a company can choose to leave an imputation group”

When you are part of a company that’s in an imputation group, you can choose to leave that group. To do this, you need to tell the Inland Revenue Department (IRD) that you want to leave.

When you tell the IRD you want to leave, you can say which day you want to stop being part of the group. If you don’t say which day, the IRD will treat you as leaving the group from the start of the tax year when they got your message.

But there’s a special rule if you joined the group and left it in the same tax year. In this case, you’re treated as leaving on the same day you joined, not from the start of the tax year.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516767.

Topics:
Money and consumer rights > Taxes
Previous

FN 10: When membership of imputation group ends, or

“How a company can stop being part of an imputation group”

Next

FN 12: Company no longer eligible or entitled to membership, or

“Company leaves tax credit sharing group when no longer eligible”

Part F Recharacterisation of certain transactions
Imputation groups of companies

FN 11Company choosing to leave imputation group

  1. This section applies when a company chooses to leave an imputation group and notifies the Commissioner of its election.

  2. When the company notifies the Commissioner of its election, it may set out in the notice a date from which it is no longer to be treated as part of the imputation group. However, unless subsection (3) applies, if the company does not set out a date in the notice, it is treated as no longer part of the imputation group from the start of the tax year in which the Commissioner receives the notice.

  3. Despite subsection (2), if a company leaves an imputation group in the same tax year in which it joined the imputation group, it is treated as leaving the imputation group on the date when it became part of the imputation group, and not from the start of the tax year.

Compare