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Income Tax Act 2007

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

OP 40: Consolidated ICA returning share transfer

You could also call this:

“Tax credit reduction for group companies when paying dividends on borrowed shares”

If you’re part of a group of companies that share tax credits, you need to know about a special rule. This rule applies when one company in your group gives a dividend to another company in the group. The dividend has a tax credit attached to it.

Here’s what happens: Your group loses some of its tax credits if the company getting the dividend is borrowing shares from someone else. This is called a “returning share transfer”. It’s not the same as just lending shares.

The amount of tax credits your group loses is the same as the tax credit on the dividend. This happens on the day the dividend is paid.

This rule is listed in a special table that shows all the ways your group can lose tax credits. It’s in row 14 of that table, under “returning share transfer”.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519495.

Topics:
Money and consumer rights > Taxes
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OP 39: Consolidated ICA replacement payment by company under share-lending arrangement, or

“Company in a tax credit-sharing group loses credits for replacement payments made in share-lending deals”

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OP 41: Consolidated ICA credit transfer by company, or

“A company in a group transfers tax credits to another company in the same group”

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

OP 40Consolidated ICA returning share transfer

  1. A consolidated imputation group has an imputation debit for the amount of an imputation credit attached to a dividend paid to a company if—

  2. at the time of payment, the company is part of the consolidated imputation group; and
    1. the dividend is paid to the company as a share user, or a person associated with a share user, in a returning share transfer that is not a share-lending arrangement.

      1. The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 14 (returning share transfer).

      2. The debit date is the day the dividend is paid.

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