IR4 Question 13 New Zealand interest

Interest from all New Zealand sources must be shown in the return. Write the total of all RWT deducted in Box 13A. If the company has had NRWT deducted from New Zealand interest, include this in Box 13A. Add up all the gross interest amounts (before the deduction of any tax) and write the total in Box 13B.

Interest on broken term deposits

If you have broken a term deposit during the year, you may have to account for “negative interest”. This is interest repaid on the term deposit and may reduce the amount of interest to declare on the tax return.

If the term deposit was broken in full, or it was business-related, deduct the negative interest from the gross interest amount shown on the RWT withholding certificate (IR15 or equivalent statement).

Deduct the allowable negative interest part, using the worksheet below, before entering the gross amount at Question 13 of the tax return. In all other cases, the negative interest is deductible in a later tax return when the term deposit matures.

Worksheet

Interest paid or charged by Inland Revenue

If Inland Revenue pay interest, include the interest in Box 13B for the income year the company received the interest.

If the company paid Inland Revenue interest, include it as a deduction in the return for the income year the interest is paid.

If expenses are deductible against the interest income, claim them at Box 19B.

Don’t send in the certificates or IR15 forms with the return, but keep them in case Inland Revenue ask for them.

Income from financial arrangements

If the company was a party to a financial arrangement, such as government stock, local authority stock, mortgage bonds, futures contracts or deferred property settlements, the income or expenditure from the financial arrangement may have to be calculated using a spreading method, rather than on a cash basis. If the financial arrangement matures or is sold, remitted or transferred, a “wash-up” calculation known as a base price adjustment must be made.

Any RWT will be deducted on a cash basis. Enter the RWT deducted and any income from the financial arrangement in Boxes 13A and 13B.