Forum Archive Index - June 2002

["Shares" <shares@whoami.com>]

Yes, Second is about right.  Fully franked has the same meaning as our term fully imputed.  You receive the benefit of tax the company has paid so as not to double tax the profits when they are paid as dividends.  The problem is that the imputation credits are not transferable from Aus to NZ and vice-versa.  As an NZ resident, you will be taxed twice effectively, - once through Aus company tax (represented as the imputation credit) and once on the dividend you receive, by the NZ IRD.  You can claim a tax credit in NZ for non-resident withholding tax (NRWT) paid in Aus, but not imputation credits.  This is one of the benefits with WPT shares in NZ.  The dividend is the same as the Aus WBC shares and the NZ shares carry a full (NZ) imputation credit, but if you had WBC rather than WPT shares you would be taxed twice as is occurring with your CBA shares.

Sorry to be so long winded.  I hope this is clear.

 

EK 

----- Original Message -----

From: Second

To: sharechat@sharechat.co.nz

Sent: Saturday, June 22, 2002 11:36 AM

Subject: Re: [sharechat] Australian Tax Inquiry & NZ Tax Return

I rang the ird last week. Thay told me I would have to pay tax on the dollar amount I recieved minus non-resident withholding tax.

 

So the franked amount and imputated credit means nothing to non australian residents.

 

So in your case you would have to pay tax on 17.58. (as there was no non-resident withholding tax)

 

I'm not confident I'm right.

 

----- Original Message -----

From: Philip Robinson

To: sharechat@sharechat.co.nz

Sent: Saturday, June 22, 2002 11:13 AM

Subject: [sharechat] Australian Tax Inquiry & NZ Tax Return

Hi there everybody,

 

I have a wee question about my NZ tax return for Australian tax credits. I have no idea how I dealt with this last year, but it seems all screwed up.

 

I have ASX CBA shares which pay me dividends, and they seem to have a wierd system. They say they are fully franked but they then pay me all of the money and do not substract the franked portion. Now you might be saying: "hey idiot, you obviously don't understand the system". But yes I do as far as it is supposed to work, they take away tax and give you franking credits, but they have given me franking credits without taking away the tax. The numbers are quite small, but if I sort it out now then when the numbers get bigger I can be sweet. I explain below (all numbers from the dividend statement):

 

Shares: 26

Dividend per share: 68 cents

Total Amount: $17.68

Franked Amount: $17.68 (ie. fully franked)

Imputation Credit: $7.58

 

So that is okay, you expect to be paid $17.68 minus $7.58, but I was paid all of the $17.68.

 

So my question is how do I fill out my return? How much tax have I paid? It seems I have paid full Australian compnay tax becasue it is fully franked, but they have not deducted an money.

 

Can any of you accountant types help with this little one.

 

Cheers

Phil