About Us » Glossary
Any cash payment made from a unit trust, a company dividend or payment in 'kind' such as additional units or shares lieu of dividend can be considered as a distribution. This can also include payments made from capital. New Zealand laws relating to the taxation of distributions are complex and beyond the scope of this primer. More information can be found at the website of the NZ Inland Revenue (www.ird.govt.nz). In particular check the tax information bulletins. (TIB’s)
Essentially the Australian equivalent of an imputation credit.
A tax credit attached to a dividend or distribution issued by a NZ company or unit trust which conveys the value of the tax paid by the company (or unit trust) to the investor.
Marginal tax rate
Can be defined as the rate of tax paid on your last dollar of income. New Zealand has a three levels of personal taxation rates. Persons whose income exceeds $60,000 has a marginal tax rate of 39%. Income between $38,000 pa and $60,000 has a marginal rate of 33%. Incomes below $38,000 have marginal rates which can vary depending on rebates etc, but will
Non – resident Withholding Tax
Tax deducted from interest and dividends paid to overseas residents. The rate varies depending on the country of residence but is usually 15% reducing to 10% for residents of those countries with which NZ has a double taxation agreement (DTA). Click here to download IR 291 on this form in PDF Format (131KB)
Resident Withholding Tax (Interest PAYE)
See withholding tax.
Person subject to the taxation laws of their country of normal residence. New Zealand residents must pay tax on their world income irrespective of the country from which it is derived. The rules which define whether a person is a New Zealand tax resident are quite clear. Click here to download IR 292 on this in PDF format (168 KB).
Unrealised Capital Gains
Gains of a capital nature which have not been 'crystallised'. Assets (shares, property, bonds) which have appreciated in value but which have not been sold have unrealised capital gains. Many NZ based funds provide for taxation on unrealised capital gains (and receive the tax benefit on unrealised capital losses)
Tax deducted from interest and dividends at source. The rate at which this is deducted for investors who provide their IRD number to the interest payer is currently at 19.5%. (Declaration rate). For investors who do not declare their IRD number to the payer the (no declaration) rate is 39%. Investors who earn more than $38,000 per annum can elect to have withholding tax deducted at 33%. Those above $60,000 per annum can elect to have withholding tax deducted at 39% pa.
Taxation legislation and rulings change frequently. Users of this site should check they have current information that is appropriate for their personal circumstances before taking any action. If in doubt they should seek professional advice.