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Income Tax Act 2007

Memorandum accounts - Memorandum accounts of consolidated groups - Imputation credits of consolidated imputation groups

OP 23: Consolidated ICA elimination of double debit

You could also call this:

“Removing duplicate tax debits for company groups”

This law talks about how a group of companies handles their tax credits and debits. Sometimes, a tax debit can cancel out a tax credit. When this happens, the group gets a new tax credit equal to the cancelled one.

The new credit can happen in three ways:

  1. If the group gets a refund from their tax deposit after they lost some shareholders.

  2. If the group transfers their right to the tax deposit to someone else after they lost some shareholders.

  3. If the tax deposit is used to figure out the group’s tax account balance with the government after they lost some shareholders.

The law also explains when the new credit is added to the group’s account. It happens on the day:

  1. The deposit is given back to the group.

  2. The right to the deposit is given to someone else.

  3. A credit shows up in the group’s tax account with the government.

This law helps make sure the group doesn’t lose out on tax credits they should have.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519457.

Topics:
Money and consumer rights > Taxes
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OP 22: Consolidated ICA transfer from group company’s ICA, or

“Moving money between company accounts in a group to pay bills”

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OP 24: Consolidated ICA reversal of tax advantage arrangement, or

“Fixing unfair tax credits for company groups sharing tax”

Part O Memorandum accounts
Memorandum accounts of consolidated groups: Imputation credits of consolidated imputation groups

OP 23Consolidated ICA elimination of double debit

  1. This section applies when an imputation debit in a consolidated imputation group’s imputation credit account under section OP 42 has the effect of cancelling an imputation credit under section OP 8.

  2. The consolidated imputation group has an imputation credit for an amount that equals the amount of the debit referred to in subsection (1), and—

  3. another debit arises under section OP 32 for a refund of the deposit on a debit date that is after the debit date for the debit for loss of shareholder continuity; or
    1. another debit arises under section OP 33 for a transfer to another person of the entitlement to the amount of the deposit on a debit date after the debit date for the debit for the loss of shareholder continuity; or
      1. the deposit is taken into account under sections RP 19 and RP 20 (which relate to transfers from tax pooling accounts) in determining the balance of the company’s tax account with the Commissioner after the debit date for the debit for loss of shareholder continuity.

        1. The table references are as follows:

        2. the imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity):
          1. the imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 3 (deposit in tax pooling account):
            1. the imputation credit in subsection (2) is referred to in table O19: imputation credits of consolidated imputation groups, row 18 (elimination of double debit):
              1. the imputation debit in subsection (2)(a) is referred to in table O20: imputation debits of consolidated imputation groups, row 6 (refund from tax pooling account):
                1. the imputation debit in subsection (2)(ab) is referred to in table O20: imputation debits of consolidated imputation group, row 7 (transfer to another taxpayer of funds in tax pooling account).

                  1. The credit date is the day—

                  2. the deposit is refunded; or
                    1. the entitlement is transferred; or
                      1. a credit arises in the company’s tax account with the Commissioner.

                        Compare
                        Notes
                        • Section OP 23(2): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 234(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OP 23(2)(a): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 234(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OP 23(2)(ab): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 234(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OP 23(3)(e): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 234(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section OP 23(4)(ab): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 234(5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).