KFL - discount to diluted NAV

[Not too Flash]

Looks like the repurchase window opportunity has closed again ....

[alokdhir]

If one chooses to include KFL income in IR3 then where to add ....NZ Dividends with imputation credits of 28% or PIE income with PIR of 28% ....I reckon new IR3 pre calculates your PIR so if u include any PIE income with right tax deducted it does not reflect in your total taxable income ...as PIE tax is final tax and maximum rate is 28% ....it only does PIR rate adjustments if paid less or more ...but no effect on your total income ...while if u include KFL income as NZ dividends then its included in total taxable income for further tax calculations ...KFL imputations credits are credited as usual at 28% ...Inquired from IRD ...they say can be included at either as KFL is PIE distributions so its PIE income

[777]

You only include the the gross amount that has the imputation credit and then only do it if your gross taxable income is less than $48,000 as there is no advantage otherwise.

[alokdhir]

You only include the the gross amount that has the imputation credit and then only do it if your gross taxable income is less than $48,000 as there is no advantage otherwise.

Question was to put KFL income where ? NZ dividends or PIE income ??

[777]

There is no place that I can see to put PIE income and I guess that is because there is no need to. If you want to claim the imputation then you would include it in the dividends section. It would then become taxable income with a credit of 28c/$ so if you were on a higher marginal rate than 28c then you would be having to pay the difference.

[alokdhir]

There is no place that I can see to put PIE income and I guess that is because there is no need to. If you want to claim the imputation then you would include it in the dividends section. It would then become taxable income with a credit of 28c/$ so if you were on a higher marginal rate than 28c then you would be having to pay the difference.

I can see both PIE income section and NZ Dividends section on my online IR3 ...thats why I was wondering to put KFL income where ? In PIE section or NZ Divi section as both result in different final tax refund outcomes !!

Second question is how to use excess imputations credits ? If u are retired with all dividends income only ?

[RRR]

My understanding is that - as an individual investor you don't have to declare your PIE income.

The only situation where you would include PIE income is when your total income (including PIE income) is below 28% income tax threshold - you would then be able to claim back some of the excess tax paid.

[777]

I have just received my IR3 completed by the IRD. It is exactly as I had worked out. The only reason that the PIE income is is recorded on it is for the IRD to check you are using the correct PIR. It otherwise plays no part in your return. Listed PIEs are not included as the PIR is at the maximum of 28c. As I stated if you have a gross income of less than $48,000 (including any KFL you wish to add in) then you can claim the imputation credit against your income. If it is over the $48,000 then it will cost you the difference in you marginal rate and the 28c on KFL gross dividend declared and the only place to get the imputation credit is to include it in the dividend section.

alok we went over this a couple of years ago. Probably on this thread somewhere.

I am retired as well and know they are no use to me as I am well in excess of $48,000.

[SPC]

Yep this had already been discussed.
Rince and repeat:
You won't get a cash refund from your Imputation credits. They can only be used to reduce final tax owed to IR.
Pie imp credits are no different to any other company imp credits. No cash refund, but if you owe tax at the end of the IR3 you can apply whatever credits you have to offset the tax owed down to a zero balance, but no further.

[alokdhir]

I just don't understand why u people cant understand my simple question !!

IF one wants to include KFL on IR3 ...where it shud go not the virtues of it or who shud do it

Answer I am looking for is ...either NZ dividends or PIE income ....as it's both as per IRD also

Why u people keep going into the merits or demerits of including KFL income ...that is well understood by me ...but will give one example for u all to understand that its not simple as u think ie only under $ 48000 u shud include

One person has only income from KFL of $ 70,000 and he gets tax credits of $ 19600 with it ...as per u people he shud not report it but while he reports it he gets a refund or tax credit of $ 4607 ...reason being KFL taxed @ 28% right from dollar 1 while actual effective rate for $ 70,000 is 21.41% only ...

This is not the issue ...issue is it goes to NZ dividends or PIE income ...rest I fully understand mates

Thanks for your time and replies ...much appreciated


PS : Also I wanted to know how to use lots of carry forward imputation credits ...Ideas being buy companies paying unimputed dividends or other forms of other income like Bank interest ...ideas about high unimputed dividends will be most welcome