Section LP 2 — Income Tax Act 2007: Tax credits for supplementary dividends

LP 2 Tax credits for supplementary dividends When this section applies (1) This section applies when a company resident in New Zealand pays a dividend and a related supplementary dividend to— (a) a non-resident, if–– (i) the non-resident has less than a 10% direct voting interest in the company; and (ii) the post-treaty tax rate for the dividend and the related supplementary dividend is 15% or more; or (b) [Repealed] Amount of credit (2) For the tax year corresponding to the income year in which the company pays the dividend, the company has a tax credit equal to an amount calculated using the formula— attached imputation credit × 54 119. Definition of item in formula (3) In the formula, attached imputation credit is the imputation credit that would, in the absence of this subpart, be attached to the dividend. Limitation on use of credit (4) A company that is a supplementary dividend holding company may choose under section LA 2 or LA 4 (which relate to the satisfaction of the company’s income tax liability) to limit the amount of a tax credit for a tax year. The reduced amount must not be less than the amount of supplementary dividends that the company derives for the income year corresponding to the tax year. Meaning of year of payment [Repealed] (5) [Repealed] Associated persons test [Repealed] (6) [Repealed] (7) Section OZ 12 (Tax credits for non-resident investors) may apply to modify subsection (2). Defined in this Act: amount , associated person , company , consolidated group , corresponding income year , direct voting interest , dividend , imputation credit , non-resident , pay , post-treaty tax rate , resident in New Zealand , supplementary dividend , tax credit , tax year Compare: 2004 No 35 ss LE 2(1), (2), (2A) , LE 3(5) Section LP 2(1)(a): substituted, on 1 February 2010, by section 78(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(1)(b): repealed, on 1 April 2011, by section 78(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(2): amended, on 1 April 2011, by section 78(3) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(2) formula: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 88(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section LP 2(2) formula: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 91(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27). Section LP 2(2) formula: amended (with effect from 1 April 2008), on 29 May 2008, by section 32(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36). Section LP 2(2) formula: amended, on 1 April 2008, by section 450(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section LP 2(5) heading: repealed, on 1 April 2011, pursuant to section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(5): repealed, on 1 April 2011, by section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(6) heading: repealed, on 1 April 2011, by section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(6): repealed, on 1 April 2011, by section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2(7): added, on 1 April 2008, by section 450(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section LP 2 list of defined terms direct voting interest : inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2 list of defined terms post-treaty tax rate : inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2 list of defined terms supplementary dividend holding company : repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 2 list of defined terms year of payment : repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).