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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 46: ICA transfer from member fund

You could also call this:

“Tax debit when an ICA company transfers money to a master fund”

When you are an ICA company, you might need to transfer money to a master fund. This is called an imputation debit. To figure out how much this debit is, you need to do some maths.

First, you look at how much money you transferred to the master fund. Then, you multiply this amount by the tax rate. The tax rate you use is the basic income tax rate that you can find in the tax rules.

You need to record this debit in your accounts. It goes into something called ‘table O2: imputation debits’ under row 19.

The date you put for this debit is the last day of the tax year when you took the money out of your account.

This rule is part of how the government keeps track of money moving between different funds and makes sure the right amount of tax is paid.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518820.

Topics:
Money and consumer rights > Taxes
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OB 45: ICA redemption debit, or

“Debit for cancelling units in a managed fund”

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OB 46B: ICA transfer from group company to loss-using group company, or

“Transfer of tax credits between companies in the same group when one is using a loss”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 46ICA transfer from member fund

  1. An ICA company has an imputation debit for an amount calculated using the formula—

    expenditure transferred × tax rate.

    Where:

    • In the formula,—

    • expenditure transferred is the amount of expenditure transferred under sections DV 5 to DV 7 (which relate to expenditure related to investment funds) by the company, as a member fund, to a master fund:
      1. tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits).

        1. The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 19 (transfer from member fund).

        2. The debit date is the last day of the tax year corresponding to the income year in which the expenditure is deducted.

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        Notes
        • Section OB 46(2)(b): amended, on , by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
        • Section OB 46 list of defined terms basic rate: repealed, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).