Imputation Credits System Changed
The treatment of excess imputation credits for individuals has been changed by Inland Revenue. Excess imputation credits are created when shareholders receive dividends that give them NZ imputation credits that are greater than their total tax payable for the year. Unlike other credits, such as resident withholding tax, unused imputation credits cannot be refunded. Instead they are converted to a deemed loss and carried forward and offset against net income in a later year.
IRD has now announced that in future any excess imputation credits received by individuals (along with unincorporated clubs and societies) will no longer be converted to a deemed loss, but will simply be carried forward. They can then be offset against tax liability in a later year.
Any existing deemed loss from the 2005 or earlier income years will continue to be carried forward as a loss until it is fully offset against net income. Companies, estates, trusts, Maori authorities and incorporated clubs and societies will continue to convert any unused imputation credits to a deemed loss.
Contact for Enquiries
The Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0720
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