CD 42 Adjustment if additional consideration paid
Differences from market value


If a dividend from a company arises because of a difference between the market value of property provided by or to the company and the consideration paid for it, the dividend is disregarded for the purposes of this Act if the conditions in subsections (2) to (4) are met.

Market value


The consideration paid must have been an amount that the company considered was the market value, having taken reasonable steps at the time of the transaction to ascertain a market value.

Difference paid


The recipient of the dividend must have later paid to the company—


sufficient additional consideration to reflect the actual market value of the property at the time of the transaction; or


a refund of any excess consideration paid by the company.

Accounts adjusted


Any necessary adjustments must have been made to the accounts of the company and the recipient for the additional consideration or refund.

Defined in this Act: amount, company, dividend, pay

Compare: 2004 No 35 s CD 31