Quote Originally Posted by Snoopy View Post

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.


SNOOPY
SNOOPY - thanks for taking the time to comment on a share you don't hold. Much appreciated.

However, I'm not sure if your comment on imputation credits being worthless to the ultimate holder is entirely correct. It will depend on where they are located.

If a dividend carries full imputation credits then the supplemental dividend means that the overseas shareholder will receive the same amount after non-resident withholding tax as they would have received had there been no supplemental dividend and no withholding tax. I.e if a company pays a 10 cent dividend the shareholder will receive 10 cents. If there is no imputation credits there will be no supplemental dividend and non-resident withholding tax will be deducted at the relevant rate (which varies depending on the residence of the recipient). In my own case (Hong Kong), non-resident withholding tax is 30% so an unimputed 10 cent dividend would end up being 7 cents in my hands.

Overseas shareholders then have to consider what tax they pay in their own jurisdiction. Some countries do not tax overseas dividend income or do so at quite low rates.

I have not looked into the location of the upstream holding company from MCK, but if it is in Singapore (where the Kwek family are headquartered) then my read of this guide from Deloitte suggests that they would not have to pay any Singapore tax on imputed dividends from a NZ company but would have to pay 15% on dividends with no imputation credits.

"Foreign income remittances in the form of dividends, branch profits, and services income derived by resident companies are exempt from tax, provided the income is received from a foreign jurisdiction with a headline tax rate of at least 15% in the year the income is received or deemed received in Singapore and the income has been subject to tax in the foreign jurisdiction. Foreign income that has been exempt from tax in the foreign jurisdiction as a direct result of a tax incentive granted for substantive businessoperations carried out in that jurisdiction will be considered as having met the “subject to tax” test."




https://www2.deloitte.com/content/da...ights-2020.pdf

Happy to be corrected on all or any of this - I only know how it works for me as a Hong Kong resident.