Section HA 15 — Income Tax Act 2007: Fully imputed distributions

HA 15 Fully imputed distributions When this section applies (1) This section applies when a qualifying company with an imputation credit account or foreign dividend payment (FDP) account pays a dividend. However, this section does not apply to a non-cash dividend other than a taxable bonus issue. Calculating amount of fully imputed distribution (2) The amount of a fully imputed distribution is calculated using the formula— attached imputation credit + attached FDP credit tax rate. Definition of items in formula (3) In the formula in subsection (2),— (a) attached imputation credit is the amount determined under subsection (4), and the amount is zero if no imputation credit is attached: (b) attached FDP credit is the amount determined under subsection (5), and the amount is zero if no FDP credit is attached: (c) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) at the time the shareholder derives the dividend, modified as applicable by section OZ 14 (Dividends from qualifying companies). ICA companies (4) A qualifying company that is an imputation credit account (ICA) company is treated as having attached an imputation credit to the dividend. The amount of the imputation credit is the lesser of— (a) the maximum imputation credit that may be attached to the dividend under section OA 18 (Calculation of maximum permitted ratios) modified as applicable by section OZ 14 ; and (b) an amount calculated using the formula in subsection (6). FDPA companies (5) A qualifying company that is a foreign dividend payment account (FDPA) company is treated as having attached a FDP credit to the dividend. The amount of the FDP credit is the lesser of— (a) the maximum FDP credit that may be attached to the dividend under section OA 18 , taking into account any imputation credit attached to the dividend under subsection (4) modified as applicable by section OZ 14 ; and (b) an amount calculated using the formula in subsection (6). Formula (6) The formula referred to in subsections (4) and (5) is— attached credits × amount of dividend amount paid before credits attached. Definition of items in formula (7) In the formula in subsection (6),— (a) attached credits is the balance in the company’s imputation credit account or FDP account, as applicable, on the last day of the tax year in which the dividend is paid before a debit is made for any imputation credits or FDP credits, as applicable, that are attached: (b) amount of the dividend is the amount before any imputation credits or FDP credits, as applicable, are attached: (c) amount paid before credits attached is the total amount of dividends, excluding non-cash dividends other than taxable bonus issues, paid by the company during the tax year before any imputation credits or FDP credits, as applicable, are attached. Relationship with imputation rules and FDP rules (8) An imputation credit or an FDP credit may not be attached to a dividend by a qualifying company except under this section. Relationship with sections HA 14 and HA 16 (9) If part of the dividend is exempt income under sections HA 14 and HA 16 , an imputation credit or FDP credit is treated as attached to the part that is not exempt income. Defined in this Act: amount , dividend , exempt income , FDP , FDP account , FDP credit , FDP rules , FDPA company , ICA company , imputation credit , imputation credit account , imputation rules , income tax , income year , non-cash dividend , pay , qualifying company , resident in New Zealand , shareholder , taxable bonus issue , tax year , Compare: 2004 No 35 s HG 13(1)–(4) Section HA 15(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 256(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HA 15(3)(c): amended, on 1 April 2008, by section 409(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section HA 15(3)(c): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section HA 15(4)(a): amended, on 1 April 2008, by section 409(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section HA 15(5)(a): amended, on 1 April 2008, by section 409(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section HA 15(9) heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 256(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HA 15(9): substituted (with effect on 1 April 2008), on 6 October 2009, by section 256(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).