Forum Archive Index - February 2000

["Mark Hubbard" <mhubbard@es.co.nz>]

From: hugh webber <hugh.webber@clear.net.nz>

> according to J B Were the UK ones also pay Imputation Credits to NZers
> through a tax agreement.
> Have you been able to use this via any of your investmets?
> cheers

No, but this is because the UK do not have a dividend imputation system, (to
my knowledge anyway). The NZ/UK double tax agreement determines which
country has the right to tax an individual/business, based on different
residency scenarios, and simply eliminates any double taxation by obliging
either of the country's to give a tax credit to the individual/business for
any tax paid in the other country.

For example, I am a NZ resident, thus if I earn't, say, a private employer
pension from UK, which had tax paid in the UK before being credited to my
bank account, I would have to return the same pension here in my  NZ tax
return  (as I have to declare my world wide income), however, I would get a
tax credit here for the tax that was paid to the UK authorities - thus, I
would not be double taxed on the same income.

Note though, that not all double tax agreements are entirely the same. For
example, one of the inconsistencies in my mind is that NZ'ers cannot use
Australian franking credits, which is a disincentive to investing in
Australian companies. I'm a bit vague on why this is though, so I must look
it up again.




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