Income Tax Act 2007

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CD 26 Capital distributions on liquidation or emigration
  • When this section applies

    (1) This section applies when a shareholder—

    • (a) is paid an amount in relation to a share on the liquidation of the company:

    • (b) is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as being paid an amount in relation to a share in the company.

    Return of subscribed capital or capital gains

    (2) The amount paid is a dividend only to the extent to which it is more than—

    • (a) the available subscribed capital per share calculated under the ordering rule; and

    • (b) the available capital distribution amount calculated under section CD 44.

    Statutory producer board capital levies

    (3) If the company is a statutory producer board, the amount is not a dividend to the extent to which it is a return of a levy charged specifically for capital development.

    Non-deductible capital

    (4) An amount that is not a dividend as a result of subsection (3) is nevertheless treated as a return of capital for the purposes of the capital limitation.

    Defined in this Act: amount, available capital distribution amount, available subscribed capital, capital limitation, company, dividend, emigrating company, levy, liquidation, ordering rule, pay, share, shareholder, statutory producer board

    Compare: 2004 No 35 s CD 18