Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Memorandum accounts - Terminating provisions

OZ 10: Modifying ratios for imputation credits

You could also call this:

“Adjusting tax credit ratios for certain dividends”

This section applies to dividends you receive between 1 October 2010 and 31 March 2013. It’s about how imputation credits work with these dividends.

If you get a dividend during this time, and the imputation ratio (which is about tax credits) is more than 28/72 but not more than 30/70, there’s a special rule.

For the purposes of section LE 8, if the amount of the imputation credit is limited by the maximum allowed ratio in section OA 18, the ratio is treated as 30/70.

This means that even if the actual ratio is slightly different, for tax purposes, it’s treated as if it were exactly 30/70. This helps to simplify some tax calculations for these specific dividends.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1632275.

Topics:
Money and consumer rights > Taxes
Previous

OZ 9: Benchmark dividends: ratio change, or

“How a company's dividend ratio changes are handled during a transitional period”

Next

OZ 11: Tax credits for imputation credits, or

“Getting tax credits when you receive dividends from companies”

Part O Memorandum accounts
Terminating provisions

OZ 10Modifying ratios for imputation credits

  1. This section applies when—

  2. a person derives a dividend in the period from 1 October 2010 to 31 March 2013; and
    1. the dividend and the imputation credits attached to the dividend, as applicable, have—
      1. an imputation ratio greater than 28/72 and less than or equal to 30/70.

          2. For the purposes of section LE 8 (Application of imputation ratio), if the amount of the imputation credit is limited by the maximum permitted ratio set out in section OA 18 (Calculation of maximum permitted ratios), the ratio is treated as 30/70.

          Notes
          • Section OZ 10: added, on , by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
          • Section OZ 10 heading: amended, on , by section 252(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10(1)(a): amended, on , by section 17(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
          • Section OZ 10(1)(b): amended, on , by section 252(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10(1)(b)(i): amended, on , by section 252(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10(1)(b)(i): amended, on , by section 17(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
          • Section OZ 10(1)(b)(ii): repealed, on , by section 252(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10(1)(b)(iii): repealed, on , by section 252(5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10(2): replaced, on , by section 252(6) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10 list of defined terms combined imputation and FDP ratio: repealed, on , by section 252(7) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10 list of defined terms FDP credit: repealed, on , by section 252(7) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10 list of defined terms FDP ratio: repealed, on , by section 252(7) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section OZ 10 compare note: repealed (with effect on 1 April 2008), on , by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).