Section RC 20 — Income Tax Act 2007: Calculating residual income tax in transitional years

RC 20 Calculating residual income tax in transitional years Calculation for transitional year (1) This section applies for the purposes of section RC 5(2) and (3) and the calculation of a person’s residual income tax for a tax year if— (a) the preceding tax year is a transitional year: (b) the tax year before the preceding tax year is a transitional year. Amount increased or decreased (2) The amount of residual income tax for the transitional year must be increased or decreased by the amount calculated under subsection (3) to reflect the amount that would apply in a 12-month period. Formula (3) The amount of residual income tax is calculated using the formula— residual income tax × days in current tax year days in transitional year. Definition of items in formula (4) In the formula,— (a) residual income tax is a person’s residual income tax, as applicable— (i) for the preceding tax year, uplifted by 5%; or (ii) for the tax year before the preceding tax year, uplifted by 10%; or (iii) the amount estimated by them: (b) days in current tax year is the number of days in the current tax year: (c) days in transitional year is the number of days in the person’s transitional year. Defined in this Act: amount , residual income tax , tax year , transitional year , Compare: 2004 No 35 s MB 19