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HA 18: Treatment of dividends when qualifying company status ends
or “How dividends are handled when a company loses its qualifying status”
You could also call this:

“Rules for qualifying companies when paying dividends and reporting them”

When a qualifying company pays a dividend that is considered fully imputed or exempt income, there are some rules you need to follow. If the dividend has an imputation credit attached, the company must subtract that amount from its imputation account on the day it pays the dividend.

For all dividends, whether they have credits or not, the company has to make two statements. These statements show how much of the dividends are income that can be taxed and how much is exempt from tax. The company needs to make a company dividend statement and a shareholder dividend statement.

The company must finish these statements by 31 May after the end of the tax year when they paid the dividends. A tax year is usually from 1 April to 31 March.

If a shareholder asks, the company also needs to include information about any non-cash dividends they received during the tax year in their shareholder dividend statement.

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Next up: HA 20: Attribution of tax losses

or “This rule about assigning tax losses is no longer used”
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Part H Taxation of certain entities
Qualifying companies (QC)

HA 19Credit accounts and dividend statements

  1. This section applies when a qualifying company pays a dividend that is treated either as a fully imputed distribution under section HA 15 or as exempt income under sections HA 14 and HA 16.

  2. For the purposes of sections OB 30 to OB 59 (which relate to imputation debits), if an imputation credit is attached to the dividend, the amount of the credit is debited to the company’s imputation account. The debit arises on the day the company pays the dividend.

  3. For all dividends, whether or not credits have been attached, the company must complete the following statements detailing the extent to which the dividends are assessable income or exempt income:

  4. a company dividend statement under section 25G of the Tax Administration Act 1994; and
    1. a shareholder dividend statement under section 29 of that Act.

      1. The company must complete the statements in subsection (3) by 31 May after the end of the tax year in which the dividends were paid.

      2. In addition to the information required in a shareholder dividend statement, if a shareholder asks the company to include in the statement the amount of a non-cash dividend that the company has paid them in the tax year, the company must provide the information.

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      Notes
      • Section HA 19(1): substituted (with effect on 1 April 2008), on , by section 258(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
      • Section HA 19(2): replaced, on , by section 127(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section HA 19(3)(a): amended, on , by section 112 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • Section HA 19 list of defined terms ask: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
      • Section HA 19 list of defined terms FDP account: repealed, on , by section 127(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section HA 19 list of defined terms FDP credit: repealed, on , by section 127(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section HA 19 list of defined terms fully imputed: inserted (with effect on 1 April 2008), on , by section 258(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).