Share payment date 31 March

When the share payment date is the 31/03/2017 but the funds are not deposited in to my bank account (ANZ Securities), in this case will probable be Monday 03/04/2017, which is after this tax year ending 31/03/2017. Are these dividends included in the tax return, ending 31/03/2017 or are they to be included in this years tax period ending 31/03/2018.

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Originally Posted by waikare

When the share payment date is the 31/03/2017 but the funds are not deposited in to my bank account (ANZ Securities), in this case will probable be Monday 03/04/2017, which is after this tax year ending 31/03/2017. Are these dividends included in the tax return, ending 31/03/2017 or are they to be included in this years tax period ending 31/03/2018.

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If the share payment date on your dividend statement is 31/3/17 or before, then you would include them in the tax year ending 31/3/17.

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Originally Posted by waikare

When the share payment date is the 31/03/2017 but the funds are not deposited in to my bank account (ANZ Securities), in this case will probable be Monday 03/04/2017, which is after this tax year ending 31/03/2017. Are these dividends included in the tax return, ending 31/03/2017 or are they to be included in this years tax period ending 31/03/2018.

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Be careful of asking for advice on this forum, especially about tax imo, some might be tempted to offer advice even though they have absolutely no qualifications to do so, which is actually illegal. You might want to ask a tax accountant if you are not sure.

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Originally Posted by Baa_Baa

Be careful of asking for advice on this forum, especially about tax imo, some might be tempted to offer advice even though they have absolutely no qualifications to do so, which is actually illegal. You might want to ask a tax accountant if you are not sure.

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He asked a basic question which requires a simply answer, it's black and white, if your payment date is on or before 31st March then dividend income is included in that years income, not the following years, nothing illegal about answering that question

Well replied couta1

And Waikari i think you will see the deposit early Monday morning in your account and it will show as deposited at 31st March 17.

If you do your accounts on an accrual basis then it appears in the year when it becomes a receivable [year to 31-Mar-17].
However if you do your accounts on a cash basis it appears in the year it is received [year to 31-Mar-18].

couta1 is making an assumption which may be valid but, I assume, probably is not.

waikare is possibly confused now.

Best Wishes
Paper Tiger

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Originally Posted by Paper Tiger

If you do your accounts on an accrual basis then it appears in the year when it becomes a receivable [year to 31-Mar-17].
However if you do your accounts on a cash basis it appears in the year it is received [year to 31-Mar-18].

couta1 is making an assumption which may be valid but, I assume, probably is not.

waikare is possibly confused now.

Best Wishes
Paper Tiger

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I think you are also confusing things, as 777 has already pointed out, waikare will find when he checks his account on 3/4/17 that payment was indeed received on 31/3/17 therefore should be included in the tax year ending 31/3/17 on either accounting basis.

If I get it in my bank before the end of FY I include it in that years tax. If it doesn't show up until April I don't. I deal with these as a cash payments status not on invoice.

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Originally Posted by couta1

I think you are also confusing things, as 777 has already pointed out, waikare will find when he checks his account on 3/4/17 that payment was indeed received on 31/3/17 therefore should be included in the tax year ending 31/3/17 on either accounting basis.

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The dividend with the payment date of the 31/03/17 have not as yet (9.10am) appeared in my account. I guess I go with G on's ... that is if the money is deposited in April then I'll included it in the year ending 31/03/18.

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Originally Posted by waikare

The dividend with the payment date of the 31/03/17 have not as yet (9.10am) appeared in my account. I guess I go with G on's ... that is if the money is deposited in April then I'll included it in the year ending 31/03/18.

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Give it an hour or so. I transferred some money to my account on Friday and it is yet to show up. Also March interest has not appeared yet.

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Originally Posted by 777

Give it an hour or so. I transferred some money to my account on Friday and it is yet to show up. Also March interest has not appeared yet.

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Yes, they can be a bit slow on doing the morning sweep at times, March interest showing now for me at 9.30.

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Originally Posted by couta1

Yes, they can be a bit slow on doing the morning sweep at times, March interest showing now for me at 9.30.

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My interest was there just after 9.00 am.

As an aside, way back in Oct 2012 I moved, by necessity, my mail service provider from Australia Post to PrivateBox (https://www.privatebox.co.nz/ - I heartily recommend them) in preparation of my move from Malaysia to Indonesia via the Philippines, Thailand & Taiwan.

Somewhere in all that a dividend cheque from Codan (ASX:CDA) went AWOL.

Every six months since then I get an automated reminder that I have not yet been paid this dividend and to contact the registry.

The registry and I gave up a long time ago trying to actually persuade the system to do either of
putting the money in a bank account of mine or
sending a cheque to any postal address which I have access to.

I just press the acknowledge button to make the reminder go away and wait another six months to press it again.

It has never been declared as income.

Best Wishes
Paper Tiger

I would suggest you check with the IRD. In this instance they'll tell you the same thing as a tax accountant and they're free.

Waikare was it a NZ dividend? Is there a dividend payment advice online at your registry dated 31/3? Has the RWT already been deducted in the payment advice dated 31/3?

Accounting on a cash basis is only accepted by the Commissioner if you are a wage or salary earner, a doctor or a lawyer. As per Section BD 3(4) of the ITA 2007 if a payment has been dealt with in your interest or on your behalf it must be recognised as derived income even if you have not personally received it. The company has paid the dividend the dividend advice is your registry dealing with it on your behalf. Arguably even on a cash basis it should be recognised on the dividend payment advice date.

As for Paper Tiger's example. It's not that clear cut. For example as per Ullrich v C of IR if you receive a cheque but you never present it to the bank you must still declare and pay tax on that cheque as derived income in the tax year the cheque is handed over. With an EFT payment I am unsure as to when the IRD considers the handing over to have happened is it upon sending or upon receipt?

Anyway if you really want peace of mind you can just check. The IRD aren't too bad to deal with.

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Originally Posted by waikare

When the share payment date is the 31/03/2017 but the funds are not deposited in to my bank account (ANZ Securities), in this case will probable be Monday 03/04/2017, which is after this tax year ending 31/03/2017. Are these dividends included in the tax return, ending 31/03/2017 or are they to be included in this years tax period ending 31/03/2018.

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This bean counting hound won't give free tax advice on this forum for a wide range of reasons but I suggest you ask yourself these questions first
1. Does it really matter which year its included in especially if its fully imputed ?
2. Will that make a material difference to your income for the year, (materiality is defined as 5% increase or decrease in gross income) ?
3. Which year is it better for you to include this dividend in ?

4. Another interesting question is why are we tending to see an increased incidence of bank payments sometimes being delayed by up to two business days ?
5. Is there a trend developing in N.Z. where banks are hanging onto people's money longer than in previous years to boost their profit ? or is this just my cynical imagination at work ?

Sorry lot's more questions than answers, if all that's too much I suggest you stick to question 1 only :)

Can't say I have noticed the banks holding on to money at all. In fact with transfers between banks being done all day long you tend to get the use of the money earlier and not after midnight as it used to be.

In this case raised by waikare , he has his dividend paid into his broking account. I would guess we all use the same account number for our deposits when we transfer money to the broker and then they manually credit our personal broking account. This simply takes time,usaually by opening of market the next day, but you are credited with it on the actual day they receive it.

I am sure waikare will pop up shortly and tell us all is well.

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Originally Posted by Roger

This bean counting hound won't give free tax advice on this forum for a wide range of reasons but I suggest you ask yourself these questions first
1. Does it really matter which year its included in especially if its fully imputed ?
2. Will that make a material difference to your income for the year, (materiality is defined as 5% increase or decrease in gross income) ?
3. Which year is it better for you to include this dividend in ?

4. Another interesting question is why are we tending to see an increased incidence of bank payments sometimes being delayed by up to two business days ?
5. Is there a trend developing in N.Z. where banks are hanging onto people's money longer than in previous years to boost their profit ? or is this just my cynical imagination at work ?

Sorry lot's more questions than answers, if all that's too much I suggest you stick to question 1 only :)

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First to answer in response to Lawson's query, earlier this morning I checked with the IRD, by email so I guess it may take few days before I get a ruling as I am sure there must be a rule in place for this situation. There are two dividends in one is Telstra which is not really a problem, as it's a DRP and the statement will read payable 31/03/17, (statement not received as yet) and the shares will probably be allocated on that day therefore should be included in the 16/17 year. The other is Steel & Tube which is cash the payment dated as the 31/03/17.

For me Roger it may matter as the income from STU may place me into the next tax bracket and I will miss out on reasonable tax refund, as I say it MAY MATTER, as I am very close reaching the limit at this point in time, but still have few more figures to come in yet.

Earlier in the year I transferred some holdings into my wife's name a she is also a Gold Card holder, so I would remain in the lower tax bracket, but appears I should have added a couple more, that would have given me bit of breathing space.

Longer than a few days in my experience waikare. I would refer you to question 3 then :)

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Originally Posted by Roger

Longer than a few days in my experience waikare. I would refer you to question 3 then :)

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At this stage probably 2017/18 year, would keep me in my current tax bracket with a refund due.

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Originally Posted by 777

Can't say I have noticed the banks holding on to money at all. In fact with transfers between banks being done all day long you tend to get the use of the money earlier and not after midnight as it used to be.

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Business accounts make payments only during weekdays, which is bloody annoying. Get paid on a Friday after about 10pm from X bank to YOUR bank and you'll likely miss the settlement window until the first settlement on Monday morning. Anything paid to/from during the weekend also settles Monday. There's no technical reason that I can see for it, just greedy banks leveraging our money.

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Originally Posted by 777

Well replied couta1

And Waikari i think you will see the deposit early Monday morning in your account and it will show as deposited at 31st March 17.

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It's in my ANZ Securities act. this morning 4/4/17 dated the 31/03/17

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Originally Posted by waikare

It's in my ANZ Securities act. this morning 4/4/17 dated the 31/03/17

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Just as 777 and I thought, there's no need to complicate things unecessarily, not sure why some do.(Not talking about you waikare)

Received my reply from IRD that I sent in on the 3rd April, to quote: "The date on the certificate/statement will the be date you can use, as if we requested the evidence this is what we would use.''

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Originally Posted by waikare

Received my reply from IRD that I sent in on the 3rd April, to quote: "The date on the certificate/statement will the be date you can use, as if we requested the evidence this is what we would use.''

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Just as I said in post number 2 above.:cool:

On a different note: it took over a month to get a reply to my question from the IRD secured email service, but only a few days to get my refund, did a online application on Sat 6th May the refund was in my bank account on the morning of the 12th.