Look-through companies

Heading: added, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 36 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

CX 63 Dividends derived after company ceased to be look-through company
Dividends

(1)

A dividend derived by a person from a company after it has ceased to be a look-through company is excluded income of the person to the extent to which it is equal to or less than the amount given by subsection (2).

Excluded income formula

(2)

For the purposes of subsection (1), the amount is calculated using the following formula:

exit dividends − dividends after look-through.

Definition of items in formula

(3)

The items in the formula are defined in subsections (4) and (5).

Exit dividends

(4)

Exit dividends is the sum of the amounts that would be dividends if the company, immediately after it ceased to be a look-through company,—

(a)

disposed of all of its property, other than cash, to an unrelated person at market value for cash; and

(b)

met all its liabilities at market value, excluding income tax payable through disposing of the property or meeting the liabilities; and

(c)

were liquidated, with the amount of cash remaining being distributed to its shareholders without imputation credits attached.

Dividends after look-through

(5)

Dividends after look-through is the total dividends paid by the company after it ceases to be a look-through company and before it pays the dividend described in subsection (1) to the person.

Defined in this Act: amount, company, dispose, dividend, excluded income, imputation credit, income tax, liquidation, look-through company, shareholder

Section CX 63: added, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 36 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section CX 63(4)(c): amended, on 1 April 2017, by section 41(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section CX 63 list of defined terms FDP credit: repealed, on 1 April 2017, by section 41(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).