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 you lend shares"

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 find the tax rate in schedule 1, part D, clause 5 of the Income Tax Act. The payment is the amount of the replacement payment, excluding an imputation credit. 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 can find more information about tax rates in clause 5 and about replacement payments in section OB 64.

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This page was last updated on 5 April 2026 — View changes

Topics:

Money and consumer rights > Taxes

RE 16: Taxable Maori authority distributions, or

"Tax on money Maori authorities pay to you"

RE 18: Payments made by RWT proxies, or

"When someone pays you dividends, they take out some tax first"

Part RGeneral collection rules
Withholding tax on resident passive income (RWT)

RE 17Replacement payments under share-lending arrangements

This section applies when a person makes a payment of resident passive income that consists of a replacement payment under a share-lending arrangement.
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):
payment is the amount of the replacement payment excluding an imputation credit attached under section OB 64 (Replacement payments):
credit attached is the amount of an imputation credit attached to the replacement payment under section OB 64:
credit transferred is the amount of an imputation credit shown in a credit transfer notice relating to the replacement payment.

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2004 No 35 s NF 2(1)(g)

Notes

Section RE 17(2) formula: replaced, on 1 April 2017, 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 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 17(3)(d): amended, on 1 April 2017, 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 1 April 2017, 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 1 April 2017, by section 270(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).