What to do at the end of the tax year
Interest or dividend income you earn will usually be taxed as you earn it. If you end up paying too much or too little tax this can be squared up at the end of the tax year. You'll need to include this income and the tax you've already paid on an Individual income tax return (IR3) or personal tax summary (PTS).
Where to get information from
Your bank or other financial institution will usually send you an annual statement (IR15) showing the gross interest or dividend details as well as the amount of RWT deducted. If you don't receive a statement and need to file a return or receive a PTS, you may need to contact your interest payer to request one.
You don't need to send us these statements but you do need to keep them in a safe place for seven years in case we need to see them later.
If you've been charged commission on any of your dividends you can claim this as an expense.
Find out if you're required to file an income tax return or receive a PTS
You can go to our calculator to find out if you're required to file an income tax return or receive a PTS.
If you're not required to file an income tax return or receive a PTS
If you're not required to file a return or receive a PTS, you may still be entitled to a refund. You'll need to wait until you have all your income details for the year including your interest, dividend and RWT information. You can then use our online calculators to work out whether you're entitled to a refund or need to pay more tax.
Interest on broken term deposits
If you've broken a term deposit during the year, you may have negative interest (see "Note" below) to account for. This is interest you've repaid on the term deposit. It may reduce the amount of interest you need to declare on your PTS or tax return.
Example
You invest $10,000 in a term deposit at 5% for 18 months with interest paid quarterly. After 12 months the bank sends you a statement saying that they have paid you $500 of interest and deducted $165 RWT.
The next month you need money urgently and withdraw all the money, breaking the term deposit. The bank imposes a penalty for breaking the term deposit early and recalculates the interest at 3% instead of 5% and adjusts your account accordingly.
So for the first 12 months you have actually received $200 less interest than your Deduction certificate for RWT on interest (IR15) or equivalent statement says. This is negative interest. You'll need to deduct the negative interest from the gross interest amount shown on your IR15 certificate before declaring the interest on your PTS or tax return.
If you only withdrew part of the term deposit, the negative interest is deductible in a later tax return when the term deposit matures.
Dividends from a listed PIE (portfolio investment entity)
PIEs that are companies listed on the New Zealand stock exchange may continue to issue dividends to their shareholders, or pay interest to their debenture holders. This is separate from PIE income paid out to investors. If you receive dividends from a PIE that is a listed company, you can choose whether to include this information in your tax return or PTS. If you receive interest from a PIE that is a listed company, you must include this information in your tax return or PTS.
Income from a PIE (portfolio investment entity)
Only include income from a PIE on your tax return that has been taxed at a rate lower than your correct portfolio investment rate (PIR).
Find out more
- Do I need to file a tax return or receive a PTS?
- Find out if you're entitled to a refund by using our personal tax summary calculator.
- Find out about personal tax summaries
- Confirm your PTS online
Date published: 27 Sep 2010
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