Dividend taxes ..

[rayonline]

Let's use my eg with MRP the smaller one.

800 units, payment rate 5.6c = dividend amount $44.80
Less RWT 3.11 = $41.69.

It says also:
NZ Imputation credit $17.42
Withholding tax $3.11
Gross Dividend $62.22

It says the current rate of resident withholding tax for NZ resident on dividends is 33%.

1. How is the imputation credit and the withholding tax calculated?

Edit. I think I got it. Imputation credit is dividend to the Gross Dividend = 28%.

Withholding tax is extra tax that makes up the difference to 33% for dividends.

So who uses a tax rate less than 33% in total? Non residents?


PS - rather than starting another thread, out of curiosity - is there anyway to purchase a NZX index?

[777]

"So who uses a tax rate less than 33% in total? Non residents?"

Anyone on less than $70,000 per year.

[rayonline]

Dividend flat rate tax at 33%?

[huxley]

Dividend flat rate tax at 33%?

Yep

See IRD website

Dividends

Dividends are paid to the owners of shares in a company. Dividends are taxed at a flat RWT rate of 33%. Dividends from a listed PIE are not liable for RWT.

[rayonline]

Yep

See IRD website

Dividends

Dividends are paid to the owners of shares in a company. Dividends are taxed at a flat RWT rate of 33%. Dividends from a listed PIE are not liable for RWT.



Yes that was what I read too. So this tax rate 33%, 30%, 10.5% you can select at Market Link Service / Compushare. Is that for interest accrued in whatever ways then?

[huxley]

I'm not sure sorry my understanding is dividends are at the flat tax rate. You could ask computershare/linked directly (id be interested to find out if you do) by email from their websites?

I see you asked about buying an nzx index on here as well. I'm not aware of anyone offering a full nzx index but you could take a look at the Smartshares products for nzx50 etc.

[Harvey Specter]

All dividends have tax withheld of 33% - imputation credits can be a maximum of 28% but can be anywhere between 0 and 28%.

Remember this isn't a final tax. If you rate rate is lower, you may be eligible for a tax refund.

[Harvey Specter]

Look up "smartshares" for index options

[rayonline]

I'm not sure sorry my understanding is dividends are at the flat tax rate. You could ask computershare/linked directly (id be interested to find out if you do) by email from their websites?

I see you asked about buying an nzx index on here as well. I'm not aware of anyone offering a full nzx index but you could take a look at the Smartshares products for nzx50 etc.

FWIW. I got a THL dividend notice from Market Link Services. I don't want to retype their letter out as their website is down.

Re: Compushare, they say this:

1. You cannot elect a RWT (Resident Withholding Tax) Rate if you have not provided your IRD Number.

2. Elected RWT Rates will apply to all your interest payments. Dividend payments will be taxed at the standard dividend tax rate and not your personal tax rate.
3. If you are a non-resident, elected RWT Rates will be superseded by your Non-Resident Withholding Rate.

[davflaws]

How do I find out which shares carry imputation credits? Is there any website or publication that lists shares on the NZX and gives the rate at which their divvies are imputed?
Without this info it is difficult to evaluate the effective return.

[craic]

The company, any company, can include imputation credits or not depending on their financial structure at that time. The percentages will vary but I can say from my own investments that SPARK usually has imputation credits at a high percentage the divident tax.
How do I find out which shares carry imputation credits? Is there any website or publication that lists shares on the NZX and gives the rate at which their divvies are imputed?
Without this info it is difficult to evaluate the effective return.

[noodles]

How do I find out which shares carry imputation credits? Is there any website or publication that lists shares on the NZX and gives the rate at which their divvies are imputed?
Without this info it is difficult to evaluate the effective return.
The NZX site shows historical dividends and associated imputation
https://www.nzx.com/markets/NZSX/securities/THL/dividends

[777]

Have a look at Birmanboy's site....


http://www.dividendyield.co.nz

[Big Blind]

The NZX site shows historical dividends and associated imputation
https://www.nzx.com/markets/NZSX/securities/THL/dividends

Dumb question(s) coming up.
I'm an employee with a marginal tax rate of 33%. I receive fully imputed dividends at 33% so I don't need to declare anything to IRD, or have any right to tax refunds. Right?
What could I be doing differently to gain a benefit from imputation credits?

[fungus pudding]

Dumb question(s) coming up.
I'm an employee with a marginal tax rate of 33%. I receive fully imputed dividends at 33% so I don't need to declare anything to IRD, or have any right to tax refunds. Right?
What could I be doing differently to gain a benefit from imputation credits?.

Retire.

[Big Blind]

.

Retire.

I wish. If only

[777]

You already get the advantage of imputation credits by putting the dividend in the bank.

[Harvey Specter]

Dumb question(s) coming up.
I'm an employee with a marginal tax rate of 33%. I receive fully imputed dividends at 33% so I don't need to declare anything to IRD, or have any right to tax refunds. Right?
What could I be doing differently to gain a benefit from imputation credits?If you owned via a company, the company tax rate is only 28% so you would get the 5% difference refunded (which is withholding tax, not imputations). Having said that, you have to pay the compliance costs of a company. and when you wanted to spend it, you would have to dividend out so would be taxed at your marginal tax rate at the time (you may have retired by then??)

[Big Blind]

If you owned via a company, the company tax rate is only 28% so you would get the 5% difference refunded (which is withholding tax, not imputations). Having said that, you have to pay the compliance costs of a company. and when you wanted to spend it, you would have to dividend out so would be taxed at your marginal tax rate at the time (you may have retired by then??)

Thanks for that harvey. Will give the company option some thought. I suspect I'm 20 years at least from retirement given my youngest is 6 months old!!