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Income Tax Act 2007

General collection rules - Refunds - ICA companies

RM 15: Changes in credit balances

You could also call this:

“How refunds and shareholder changes affect your tax credit balance”

If you get a refund or transfer money as described in sections RM 13 and RM 14, your credit balance is treated as being lower by that amount if it happens in the same tax year.

Your credit balance is treated as being higher if your company loses shareholder continuity. This happens when there’s a debit to your company’s imputation credit account under section OB 41. The increase happens after a credit is made to your imputation credit account for an amount that has paid your company’s income tax for the tax year. This increase occurs before the date when your credit balance is worked out under sections RM 13 and RM 14.

If your company has a refundable tax credit for a tax year after losing shareholder continuity (which causes a debit under section OB 41), your credit balance for that tax year goes up. The increase is equal to whichever is smaller: the debit under section OB 41, or the amount by which your refundable tax credit is more than the total credits to your company’s imputation credit account. These credits are for amounts paying your company’s income tax between when the debit happened and when your credit balance is worked out under sections RM 13 and RM 14.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520445.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
Refunds: ICA companies

RM 15Changes in credit balances

  1. A credit balance is treated as reduced by the amount of a refund or transfer as described in sections RM 13 and RM 14 that is made earlier in the same tax year.

  2. A credit balance is treated as increased by an amount equal to a debit to the company’s imputation credit account under section OB 41 (ICA debit for loss of shareholder continuity) arising after a credit is made to the company’s imputation credit account for an amount that has satisfied the company’s income tax liability for the tax year and before the date on which the credit balance is to be determined under sections RM 13 and RM 14.

  3. For a company that has a refundable tax credit for a tax year after a debit to the company’s imputation credit account arises under section OB 41 (ICA debit for loss of shareholder continuity), a credit balance for the tax year is increased by an amount equal to the lesser of—

  4. the debit under section OB 41:
    1. the amount by which the refundable tax credit exceeds the total credits to the company’s imputation credit account, for amounts satisfying the company’s income tax liability, during the period from the date of the debit to the date on which the credit balance is to be determined under sections RM 13 and RM 14.

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      Notes
      • RM 15(3) heading: inserted, on , by section 234 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • RM 15(3): inserted, on , by section 234 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).