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Income Tax Act 2007

Memorandum accounts - Memorandum accounts of consolidated groups - Introductory provisions

OP 3: Changes in consolidated imputation groups

You could also call this:

“How imputation credit accounts work when consolidated groups change”

When a consolidated group that is also a consolidated imputation group starts an imputation group with a company not part of another consolidated group, it keeps the same imputation credit account.

If two or more consolidated imputation groups join to form one imputation group, they must record all the credits and debits from their old accounts in the new group’s imputation credit account. This includes credits and debits from before the change and any that happen after for companies in the new group.

If an imputation group changes to become a consolidated group that is also a consolidated imputation group, it continues to use its existing imputation credit account.

At the start of each tax year, the opening balance for the consolidated imputation group’s account is calculated in two ways:

  1. If multiple imputation groups joined to form the consolidated imputation group, the opening balance is the sum of all their previous opening balances.

  2. If an imputation group changed to become a consolidated imputation group, the opening balance is the sum of the opening balances of all the imputation groups that made this change.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519416.

Topics:
Money and consumer rights > Taxes
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OP 2: When credits and debits arise only in group accounts, or

“Rules for recording credits and debits in group company accounts”

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OP 4: Resident imputation subgroups, or

“Rules for tracking credits and debits in resident imputation subgroups”

Part O Memorandum accounts
Memorandum accounts of consolidated groups: Introductory provisions

OP 3Changes in consolidated imputation groups

  1. A consolidated group that is a consolidated imputation group continues to have the same imputation credit account if the group starts an imputation group with a company that is not part of another consolidated group.

  2. The companies that are part of 2 or more consolidated imputation groups that choose to combine to form 1 imputation group must record in the imputation credit account of the new group—

  3. all credits and debits in the imputation credit accounts of the 2 groups immediately before the election takes effect; and
    1. all credits and debits that arise for a group company that is part of the new group on and after the election takes effect.

      1. An imputation group continues to use its imputation credit account if the companies that are part of the imputation group choose to convert their status to that of a consolidated group that is a consolidated imputation group.

      2. The opening balance for a tax year for the imputation credit account of the consolidated imputation group is determined as follows:

      3. for an imputation group to which subsection (2) applies, the opening balance is equal to the amount that is the sum of the opening balances of each imputation group that is part of the consolidated imputation group:
        1. for an imputation group to which subsection (3) applies, the opening balance is the amount that is the sum of the opening balances of the imputation groups that chose to convert their status.

          Compare
          Notes
          • Section OP 3(4): replaced, on (with effect on 1 April 2008), by section 171(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
          • Section OP 3 list of defined terms amount: inserted, on (with effect on 1 April 2008), by section 171(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
          • Section OP 3 list of defined terms tax year: inserted, on (with effect on 1 April 2008), by section 171(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).