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Income Tax Act 2007

General collection rules - Withholding tax on resident passive income (RWT)

RE 17: Replacement payments under share-lending arrangements

You could also call this:

"Tax on replacement payments when lending shares"

Illustration for Income Tax Act 2007

When you make a payment of resident passive income that is a replacement payment under a share-lending arrangement, this section applies to you. You calculate the tax for the payment using a formula. The formula is: (tax rate × payment ÷ (1 − tax rate)) − credit attached − credit transferred. You use the basic rate set out in schedule 1, part D, clause 5 for the tax rate. The payment is the amount of the replacement payment, excluding an imputation credit attached under section OB 64. The credit attached is the amount of an imputation credit attached to the replacement payment under section OB 64. The credit transferred is the amount of an imputation credit shown in a credit transfer notice relating to the replacement payment. You need to know what these terms mean to calculate the tax correctly. The tax rate, payment, credit attached, and credit transferred are all important for the formula.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520258.

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Topics:
Money and consumer rights > Taxes
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Part RGeneral collection rules
Withholding tax on resident passive income (RWT)

RE 17Replacement payments under share-lending arrangements

  1. This section applies when a person makes a payment of resident passive income that consists of a replacement payment under a share-lending arrangement.

  2. The amount of tax for the payment is calculated using the formula—

    (tax rate × payment ÷ (1 − tax rate)) − credit attached − credit transferred.

    Where:

    • In the formula,—

    • tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits):
      1. payment is the amount of the replacement payment excluding an imputation credit attached under section OB 64 (Replacement payments):
        1. credit attached is the amount of an imputation credit attached to the replacement payment under section OB 64:
          1. credit transferred is the amount of an imputation credit shown in a credit transfer notice relating to the replacement payment.

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              Notes
              • Section RE 17(2) formula: replaced, on , by section 270(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
              • Section RE 17(3)(a) tax rate: amended, on , by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
              • Section RE 17(3)(d): amended, on , by section 270(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
              • Section RE 17(3)(e): repealed, on , by section 270(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
              • Section RE 17 list of defined terms FDP credit: repealed, on , by section 270(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).