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Income Tax Act 2007

Memorandum accounts - Available subscribed capital accounts (ASCA)

OF 5: ASCA transfer to imputation credit account

You could also call this:

“Moving money from a company's ASC account to its imputation credit account”

You can choose to move some or all of the money from your company’s Available Subscribed Capital (ASC) account to its imputation credit account. This is called an ASCA transfer.

When you do this, the amount you move is taken out of your ASC account and added to your imputation credit account. The amount added to your imputation credit account is worked out using a special formula.

You can make this choice at any time if your company has an imputation credit account. To do it, you need to record the amount you’re moving as both a debit in your ASC account and a credit in your imputation credit account.

The date of this transfer is usually the day you choose to do it. But if you’re doing it because your company is stopping its imputation credit account, the date is the day before that happens.

The formula for working out how much to add to your imputation credit account is: credit balance × maximum imputation ratio. The ‘credit balance’ is the amount you choose to move, and the ‘maximum imputation ratio’ is worked out using rules in section OA 18(2).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519275.

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Part O Memorandum accounts
Available subscribed capital accounts (ASCA)

OF 5ASCA transfer to imputation credit account

  1. An ASC account company may choose that some or all of the credit balance in the company’s ASC account is transferred to the company’s imputation credit account.

  2. The amount of the credit balance transferred is—

  3. an ASC debit for the full amount of the credit balance transferred; and
    1. an imputation credit under section OB 18 (ICA transfer from ASC account) for the amount calculated under subsection (4).

      1. The ASC debit in subsection (2)(a) is referred to in table O12: ASC debits, row 2 (transfer to imputation credit account). The imputation credit in subsection (2)(b) is referred to in table O1: imputation credits, row 16 (transfer from ASC account).

      2. The amount of the credit to the imputation credit account is calculated using the formula—

        credit balance × maximum imputation ratio.

        Where:

        • In the formula,—

        • credit balance is some or all of the credit balance in the company’s ASC account that the ASC account company chooses to use:
          1. maximum imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).

            1. An election under subsection (1) may be made at any time when the company is an imputation credit account (ICA) company.

            2. A company makes an election under subsection (1) by recording the credit balance transferred as—

            3. a debit in the company’s ASC account; and
              1. a credit in the company’s imputation credit account.

                1. The debit date is—

                2. the day of election; or
                  1. the day before the company stops being an ICA company if the election is made on the occasion of cessation.

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