Originally Posted by
Snoopy
There is another way to distribute imputation credits, rather than just paying a bumper dividend. That is to make a taxable pro-rata bonus share issue.
The ultimate owners have no incentive to realise imputation credits because they are overseas owners. Overseas tax authorities do not recognise imputation credits, so they are of no value to the Kwek family.
As a first step, you could in effect transfer imputation credits from CDL to MCK as both of those are NZ entities. But you have to ask the question: "Is it more sensible to have your capital in a land development company in a country chronically short of housing, or in a hotel company with a severely impacted tourism market?"
I would suggest the former is by far the best use of that capital. So from my perspective transferring capital out of CDL will only benefit minority NZ domiciled shareholders. And if the big bosses are headquartered in Singapore, you don't care about them. Consequently I would see the chances of a 'bumper dividend' from CDL to utilise those imputation credits being near enough to zero.
SNOOPY