Section LP 8 — Income Tax Act 2007: Relationship with exempt income rules

LP 8 Relationship with exempt income rules What this section applies to (1) This section applies to a supplementary dividend holding company that derives a dividend and related supplementary dividend in an income year when, but for this section, both dividends would be exempt income under section CW 10 (Dividend within New Zealand wholly-owned group). Income (2) The supplementary dividend holding company derives assessable income equal to an amount calculated using the formula— attached credit + dividend tax rate. Definition of items in formula (3) In the formula,— (a) attached credit is the imputation credit attached to the dividend: (b) dividend is the supplementary dividend related to the dividend: (c) tax rate is the basic rate of income tax set out in schedule 1, part A (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits). Treatment of imputation credit (4) The imputation credit referred to in subsection (3) is assessable income of the supplementary dividend holding company for the income year for the purposes of section LE 1 (Tax credits for imputation credits). (5) Section OZ 12 (Tax credits for non-resident investors) may apply to modify subsection (3)(c). Defined in this Act: amount , assessable income , dividend , exempt income , imputation credit , income tax , income year , supplementary dividend , supplementary dividend holding company , Compare: 2004 No 35 s LE 3(6), (8) Section LP 8(2) formula: substituted (with effect on 1 April 2008), on 7 December 2009, by section 80(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section LP 8(3)(c): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section LP 8(5): added, on 1 April 2008, by section 452 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).