KFL - discount to diluted NAV

[alokdhir]

OK, so I am STILL confused.

From everything I've been reading here, I was under the impression that the imputation credits are only useful if I OWE tax. If I am already getting a refund, are you saying it would be more if I claimed the credits?

It's really not a big deal for me given the size of my holdings - total credits would probably be less than $100. A moot point now anyway, as this year I was given no opportunity to amend their assessment - it was paid into my bank account the day after I received the refund notification (with no request to "please confirm").

Having said that, it would be good to get my head around this for next year - which I obviously still do not

As u have real cash deducted as PAYE ...I think u will get bigger refund if u include KFL imputations ...as IRD need extinguish imputations credits first then cash tax credits are used ...so if u have more imputation credits then your actual tax payable then all cash tax credits will be refunded ...as your overall income is below threshold ...its no harm to include them ... if u getting carry forward imputation credits that means your all cash tax credits being refunded already

PS : U can still amend your return to include these in your NZ dividend section and maybe will get more refund as they need use imputation credits first before cash tax paid credits

[Snoopy]

IR provides a mechanism to have excess tax returned. But not for fixed rate PIEs like kingfish.

OK, I want to make sure we are on the same page talking about this. I have myself received from the IRD a 'summary of income'. There is:

i/ A category for 'Interest',
ii/ A category for 'Dividends' and
iii/ A category for 'PIE Income'.

I don't own any Kingfish. But if I did, under which of the above three categories would 'Kingfish' appear?

SNOOPY

[777]

OK, I want to make sure we are on the same page talking about this. I have myself received from the IRD a 'summary of income'. There is:

i/ A category for 'Interest',
ii/ A category for 'Dividends' and
iii/ A category for 'PIE Income'.

I don't own any Kingfish. But if I did, under which of the above three categories would 'Kingfish' appear?

SNOOPY

Nowhere as listed PIE's income will not have any affect on determining whether your PIR being used for non listed PIEs is correct.

[alokdhir]

OK, I want to make sure we are on the same page talking about this. I have myself received from the IRD a 'summary of income'. There is:

i/ A category for 'Interest',
ii/ A category for 'Dividends' and
iii/ A category for 'PIE Income'.

I don't own any Kingfish. But if I did, under which of the above three categories would 'Kingfish' appear?

SNOOPY

Listed PIEs are not required to report ...unlike MRP PIES ...so it wont be there ...but if u CHOSE to include KFL ...it will be added to NZ Dividends

[Snoopy]

Listed PIEs are not required to report ...unlike MRP PIES ...so it wont be there ...but if u CHOSE to include KFL ...it will be added to NZ Dividends

OK listed PIEs are not required to report to the IRD. That is news to me so, I have learned something. But I presume listed PIEs are required to report to you personally as a unit holder.

I have some unlisted PIE term deposits. My IRD statement reports three things:

a/ Attributed PIE Income/Loss
b/ PIE tax paid
c/ PIR charged (which in my case is 28%)

If I was a KFL unitholder (which I am not), what information would be reported back to me on my KFL statement?

SNOOPY

[alokdhir]

OK listed PIEs are not required to report to the IRD. That is news to me so I have learned something. But I presume listed PIEs are required to report to you personally as a unit holder.

I have some unlisted PIE term deposits. My IRD statement reports three things:

a/ Attributed PIE Income/Loss
b/ PIE tax paid
c/ PIR charged (which in my case is 28%)

If I was a KFL unitholder (which I am not), what information would be reported back to me on my KFL statement?

SNOOPY

KFL gives quarterly distributions which come under the heading of " PIE Distribution "

It has two components ...one is called excluded income which comes from capital transactions thus not IRD worthy or to be included anywhere

Part two is fully imputed income @ max pie rate of 28% ....which is highlighted in a box with heading PIE Tax Information ...it has gross dividend paid plus imputation credits @ 28% attached

Bottom says investor can choose to include imputed dividend part if suitable

In your format it will have following

1. Excluded income ...part of total dividend declared

2. Fully Imputed Dividend @ 28%

PIE tax details in a box ....which has fully imputed Gross Dividend part of total dividend and Imputation Credits attached@28% and with tax withheld part always being 0

[Snoopy]

KFL gives quarterly distributions which come under the heading of " PIE Distribution "

Thanks, so KFL gives you four dividend statements throughout the year, as dividends are paid. There is no 'wrap up' statement at the end of the year that summarizes all the payments you have received throughout the year?

It has two components ...one is called excluded income which comes from capital transactions thus not IRD worthy or to be included anywhere

Yes the 'excluded income' is just assets Kingfish have sold to make up the difference between the dividends received from the underlying share portfolio owned by KFL, and the cash payment they promised you as a unit holder. The reason this 'income' is excluded is because it is not income by any IRD definition. 'Excluded income' means Kingfish are selling assets that you -as a unit holder- already own, and they are giving this 'sold on capital' back to yourself.

Part two is fully imputed income @ max pie rate of 28% ....which is highlighted in a box with heading PIE Tax Information ...it has gross dividend paid plus imputation credits @ 28% attached

The above does not sound right. The gross dividend paid should include the imputation credits paid. IOW the imputation credits are part of the gross dividend paid. They are not an extra. There is no 'plus' here.

Bottom says investor can choose to include imputed dividend part if suitable

In your format it will have following

1. Excluded income ...part of total dividend declared

2. Fully Imputed Dividend @ 28%

PIE tax details in a box ....which has fully imputed Gross Dividend part of total dividend and Imputation Credits attached@28% and with tax withheld part always being 0

Withholding tax being zero makes sense because the PIE regime says that once a PIE entity has paid tax to a rate of 28%, that is the end of the income tax liability, no matter what the individual tax rate of the individual unit holders might be.

There is something funny about the reporting language used though. 'A fully imputed Gross dividend' is generally understood to mean the amount paid out before any tax deductions are made. So you can't have a 'fully imputed Gross dividend' part of a 'total dividend'. They are one and the same thing!

If a dividend comes with 'imputation credits attached' that means it is a 'net dividend' not a 'gross dividend', does it not?

SNOOPY

[kiora]

Listed PIEs are not required to report ...unlike MRP PIES ...so it wont be there ...but if u CHOSE to include KFL ...it will be added to NZ Dividends

If the wrong PIR rate is used then the dividend needs to be reported in the tax return?

[justakiwi]

No, because the tax rate is 28% regardless and you cannot claim any overpaid tax due to your PIR being less than 28%. So if you used the wrong PIR is has zero effect (I think).

If the wrong PIR rate is used then the dividend needs to be reported in the tax return?

[777]

If the wrong PIR rate is used then the dividend needs to be reported in the tax return?

You don't chose a PIR for listed PIEs.