Trans-Tasman imputation rules and additional help

• Rules for allocating imputation credits to dividends
  • Maximum ratio
  • Benchmark dividend
• Streaming and trading
• Change of shareholder continuity
• For more help
  • Website
  • Booklets
  • Tax Information Bulletins
  • Telephone enquiries
  • Email enquiries
  • Postal addresses
  • International Audit Unit

Rules for allocating imputation credits to dividends

A company may choose whether or not to attach imputation credits to dividends it pays to its shareholders. However, if it chooses to do so it must follow certain rules. If a company decides to attach imputation credits to dividends it pays there is a maximum ratio of credit to dividend that can be allocated.

Maximum ratio

The maximum ratio is currently 33:67 or 49.25%.

Benchmark dividend

The first dividend paid by a company in an imputation year is called the "benchmark dividend". This dividend sets the ratio between credits and dividends for the rest of the imputation year.

Every subsequent dividend the company pays during that imputation year must have the same proportion of credits attached. Similarly, if the benchmark dividend has no credits attached, the company cannot attach credits to any subsequent dividends it pays in the same imputation year.

Streaming and trading

Arrangements that allow one shareholder or groups of shareholders to receive a greater tax advantage than another shareholder or groups of shareholders are void and the associated imputation credits are lost.

Change of shareholder continuity

Imputation credits can only be passed on to shareholders if at least 66% of the company's voting rights and/or market value interests have not changed hands from the date the credits arose in the ICA to the date when they are passed on to the shareholders.

For more help

Booklets

A lot of this information and more can be found in the Imputation - a guide for New Zealand companies (IR274) booklet.

Tax Information Bulletins

The Tax Information Bulletin (TIB) Vol 16, No 1 (February 2004) has details on trans-Tasman imputation and imputation grouping.

The TIB is our monthly publication containing detailed technical information about all tax changes. This is available under "Newsletters and bulletins".

Telephone enquiries

Phone the Corporates enquiry line on 0800 443 773 from NZ, or 64 4 802 6020 from outside NZ. You can also fax on 64 4 384 5883

Email enquiries

You can e-mail transtasman@ird.govt.nz with any questions you may have.

Postal addresses

If you have any further enquiries you can write to:

International Audit Unit
Corporates, Inland Revenue Department
P O Box 2198
Wellington
New Zealand

Date published: 01 Jan 2005

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