IR Schedules New Zealand dividends

Dividends are a part of a company’s profits that it passes on to its shareholders. Unit trusts are treated as companies for income tax purposes and unit trust distributions are treated as dividends.

Complete Question 14 if you received any New Zealand dividends between 1 April 2018 and 31 March 2019, including dividends from your local electricity or gas company (but don’t include a dividend that’s a distribution of the trust’s capital and is tax-free). The company or unit trust that paid you the dividend will send you a dividend statement.

Include dividends earned by a partnership or estate, or distributed by a trust.

If you were charged commission on any of your dividends, claim this at Question 26. Read the notes about expenses at Other expenses and deductions.

If you receive dividends from a portfolio investment entity (PIE) that is a listed company and doesn’t use your prescribed investor rate, you can decide whether or not to include the dividends in your return.

Credits attached to dividends

A New Zealand company or unit trust may attach several types of credits to dividends.

“Imputation credits” are credits for part of the tax the company has already paid on its profits so the dividends aren’t taxed twice.

“Payment for a foreign dividend” are credits for tax the company paid on dividends it received from overseas.

RWT is deducted from your dividend to bring the total credits withheld up to 33% of the gross dividend.

If the dividend is from a listed PIE, it should not have RWT deducted.

What to show on your return

Your dividend statements show the amount:

you received (net dividend)
of any imputation credit
of any RWT totals or payment for foreign dividends.

Add all these amounts together to work out your gross dividend.

Add up all the imputation credits, RWT or payment for a foreign dividend and gross dividend totals and transfer them to the relevant boxes at Question 14.

If the dividends are from a partnership, look-through company, estate or trust, please tick Box 14C.

Don’t send Inland Revenue your dividend statements, but keep them in case they ask for them later.

Shares received

If you received shares from a taxable bonus issue, non-cash dividend or employee share plan, include them as income at Question 14.

If a company gave you shares, don’t include the value of the free shares in your return, unless you received them from your employer. Any benefit derived from free or discounted shares received from an employer may be taxable income.

Dividends from overseas

Please read the notes about IR3 Question 17 Overseas income.