Section RC 23 — Income Tax Act 2007: Calculating instalments in transitional years: estimation method

RC 23 Calculating instalments in transitional years: estimation method When this section applies (1) This section applies to a person liable to pay provisional tax using the estimation method in relation to instalments of provisional tax payable in a transitional year under section RC 21 . Instalment other than final instalment (2) For an instalment date other than the date of the final instalment, the person must pay an amount calculated using the formula— tax estimate × instalments payable − tax previously payable. transitional months Definition of items in formula (3) In the formula,— (a) tax estimate is the person’s provisional tax liability last estimated by the person under section RC 5(5) : (b) instalments payable is either— (i) 4 multiplied by the number of instalments in the person’s transitional year payable on or before the instalment date, for a person who pays on the equivalent of instalment dates B, D, and F; or (ii) 6 multiplied by the number of instalments in the person’s transitional year payable on or before the instalment date, for a person who pays on the equivalent of instalment dates C and F: (c) transitional months is the number of months in the person’s transitional year: (d) tax previously payable is the amount of provisional tax for a tax year calculated on the basis of the person’s transitional year that is payable before the instalment date. Final instalment (4) For the final instalment, the person must pay the amount calculated under section RC 5(5) less the amount of any instalment previously payable. Defined in this Act: amount , final instalment , instalment date , pay , provisional tax , tax year , transitional year , Compare: 2004 No 35 s MB 22