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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 35: ICA transfer within tax pooling account

You could also call this:

“Moving money in a tax pooling account affects company tax credits”

This law is about what happens when a company moves money within a tax pooling account. If you have a company that uses imputation credits, this might apply to you.

When your company has the right to some money in a tax pooling account, you get an imputation credit. This credit can come from putting money into the account or moving money from another account.

If the company that manages the tax pooling account (called an intermediary) moves your money to someone else, your company gets an imputation debit. This means you lose some of your credits.

The timing of when this debit happens depends on whether your company is a qualifying company or not. If it’s not a qualifying company, the debit could happen on the last day of the previous tax year, the day the money is moved, or a mix of both. It depends on how much credit you had in your account.

If your company is a qualifying company, the debit happens on the day the money is moved.

This whole process is recorded in something called table O2, which keeps track of imputation debits. The transfer within the tax pooling account is listed in row 7 of this table.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518776.

Topics:
Money and consumer rights > Taxes
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OB 34: ICA refund from tax pooling account, or

“Recording a company's tax refund from a pooling account”

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OB 35B: ICA debit for transfer from tax pooling account for policyholder base liability, or

“Life insurer gets imputation debit for tax pooling transfer to pay policyholder income tax”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 35ICA transfer within tax pooling account

  1. This section applies for an ICA company when—

  2. the company has an entitlement to an amount in a tax pooling account and has an imputation credit for the entitlement under—
    1. section OB 5 (table O1: imputation credits, row 3 (deposit in tax pooling account)); or
      1. section OB 6 (table O1: imputation credits, row 4 (transfer from tax pooling account)); and
      2. the intermediary transfers the entitlement from the company to another person.

        1. The company has an imputation debit for a tax year for the amount of the transfer of the entitlement to funds in the tax pooling account.

        2. The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 7 (transfer within tax pooling account).

        3. The debit date for a company that is not a qualifying company is—

        4. the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the account on that date; or
          1. the day the transfer is made to the extent of the remaining amount of the debit that is no more than the credit balance in the imputation credit account on the day of the transfer; or
            1. the last day of the previous tax year for the remainder of the debit.

              1. The debit date for a qualifying company is the day the transfer is made.

              Compare
              Notes
              • Section OB 35(1): substituted (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 99(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
              • Section OB 35(4)(b): substituted (with effect on 1 April 2008), on , by section 391 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
              • Section OB 35(5): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 99(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).