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Income Tax Act 2007

Memorandum accounts - Terminating provisions

OZ 3: Overpaid income tax for pre-imputation income year

You could also call this:

“How companies handle tax overpayments from before the imputation system”

If you are a company that uses an imputation credit account (ICA), you might have to deal with overpaid income tax from before the imputation system started. When this happens, you get an imputation debit. This means the amount of overpaid tax is taken off your imputation credit account.

The overpaid tax is used to pay for your income tax bill from a year before the imputation system began. This is explained in section BB 1.

There’s an exception to this rule. If you’ve already had a debit because you lost shareholder continuity (as described in section OB 41), and the overpaid tax is less than or equal to that debit, then you don’t get another debit for the overpaid tax.

The day you use the overpaid tax to pay your bill is the day the debit is recorded in your account.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519714.

Topics:
Money and consumer rights > Taxes
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OZ 2: No imputation debit for pre-imputation refund, or

“Old tax refunds don't reduce a company's current tax credits”

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OZ 4: Terminating modifications to debits for loss of shareholder continuity, or

“Special rules for company account credits when ownership changes”

Part O Memorandum accounts
Terminating provisions

OZ 3Overpaid income tax for pre-imputation income year

  1. An ICA company has an imputation debit for an amount of overpaid income tax that is applied to satisfy the company’s income tax liability under section BB 1 (Imposition of income tax) for a pre-imputation income year. Subsection (2) overrides this section.

  2. The debit does not include an amount of overpaid income tax that is—

  3. paid before an imputation debit under section OB 41 (ICA debit for loss of shareholder continuity); and
    1. no more than the debit for loss of shareholder continuity.

      1. The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 11 (overpayment of income tax). The imputation debit in subsection (2)(a) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).

      2. The debit date is the day the amount is applied.

      Compare
      Notes
      • Section OZ 3 heading: amended, on , by section 247(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section OZ 3(1): replaced, on , by section 247(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section OZ 3(2): amended, on , by section 247(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section OZ 3(3): amended, on , by section 247(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section OZ 3 list of defined terms FDP: repealed, on , by section 247(5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section OZ 3 list of defined terms FDPA company: repealed, on , by section 247(5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).