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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 44: ICA debit on leaving wholly-owned group

You could also call this:

“Tax account adjustment when a company leaves a group”

When you’re part of a group of companies that are all owned by the same people, you need to know about something called an imputation credit account. This is a special account that keeps track of money for tax purposes.

If one company in the group decides to leave, it can affect the other companies’ accounts. When this happens, the company that’s leaving (let’s call it Company B) can choose to move some of its account balance to another company in the group (let’s call it Company A).

The amount that Company B decides to move becomes a ‘debit’ in Company A’s account. This means Company A’s account balance goes down by that amount.

This debit is recorded in a special list called ‘table O2: imputation debits’. It’s listed as row 17 and is described as a ‘debit balance on leaving wholly-owned group’.

The date when this debit is recorded is the same day that Company B officially stops being part of the group.

You can find more information about how a company can choose to move its balance in section OB 13.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518805.

Topics:
Money and consumer rights > Taxes
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OB 43: ICA breach of imputation ratio, or

“Penalty for giving too many imputation credits with dividends”

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“Debit for cancelling units in a managed fund”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 44ICA debit on leaving wholly-owned group

  1. An ICA company (company A) has an imputation debit for an amount equal to the amount of an imputation debit that another company (company B) chooses under section OB 13 as a debit to company A’s imputation credit account when company B leaves a wholly-owned group of companies.

  2. The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 17 (debit balance on leaving wholly-owned group).

  3. The debit date is the date when the company B stops being part of the wholly-owned group.

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