ANZ.NZX - Anyone holding?

[Nor]

So spend hundreds consulting an accountant. Probably cheaper just to declare it as income.

[Snoopy]

So spend hundreds consulting an accountant. Probably cheaper just to declare it as income.

A rights issue taken up , or proceeds of such if you sell the rights, is not income. No need to spend hundreds of dollars at the accountants office to determine that.

SNOOPY

[Bjauck]

A rights issue taken up , or proceeds of such if you sell the rights, is not income. No need to spend hundreds of dollars at the accountants office to determine that.

SNOOPY

My original question concerned the situation where the NZ resident shareholder lets the rights lapse and ANZ sells those rights on behalf of shareholders. ANZ then distributes any premium obtained to shareholders. Are you saying that distribution, without ANZ getting NZ court approval, is not a taxable dividend in the hands of NZ resident ANZ shareholders?

Dividends are in specie (e.g. DRiP or demerger) or cash distributions to a shareholder from a company . Distributions may be subject to NZ income tax. Disclaimer: As far as I understand. DYOR.

[Snoopy]

My original question concerned the situation where the NZ resident shareholder lets the rights lapse and ANZ sells those rights on behalf of shareholders. ANZ then distributes any premium obtained to shareholders. Are you saying that distribution, without ANZ getting NZ court approval, is not a taxable dividend in the hands of NZ resident ANZ shareholders?

Dividends are in specie (e.g. DRiP or demerger) or cash distributions to a shareholder from a company . Distributions may be subject to NZ income tax. Disclaimer: As far as I understand. DYOR.

A rights issue is the way that shareholders contribute capital to a company. It is a capital transaction where you as a shareholder give money to the company to allow ANZ (in this instance) to expand its capital base. It is you as a shareholder giving money to the ANZ, - not the other way around.

The markets may price this 'right', a capital asset to have value, if someone is prepared to pay more than the rights issue execution price. If so, you may sell this 'right', which is I repeat an asset, to another player in the market. In this particular situation, ANZ has offered to act as an intermediary, forwarding on any 'premium obtained' that a third market player was willing to pay for your 'right'. This 'premium money' has not come from ANZ. It has come from the third party market player that bought your rights,

If you are still not convinced, think of it this way. If you had taken up your rights, it would have been you that was giving new capital to the ANZ directly. Are you seriously suggesting that if you contribute new operating capital to a company that you should pay tax on your own capital contribution? I don't disagree with anything you have written in the post I am replying to. But the money you get from selling your rights rather than executing them is not a cash distribution from ANZ. It is cash being paid for an asset (in this case your 'right') on behalf of someone else (the third party that bought your rights).

SNOOPY

[Nor]

More posts like this Snoopy!

[Bjauck]

A rights issue is the way that shareholders contribute capital to a company. It is a capital transaction where you as a shareholder give money to the company to allow ANZ (in this instance) to expand its capital base. It is you as a shareholder giving money to the ANZ, - not the other way around.

The markets may price this 'right', a capital asset to have value, if someone is prepared to pay more than the rights issue execution price. If so, you may sell this 'right', which is I repeat an asset, to another player in the market. In this particular situation, ANZ has offered to act as an intermediary, forwarding on any 'premium obtained' that a third market player was willing to pay for your 'right'. This 'premium money' has not come from ANZ. It has come from the third party market player that bought your rights,

If you are still not convinced, think of it this way. If you had taken up your rights, it would have been you that was giving new capital to the ANZ directly. Are you seriously suggesting that if you contribute new operating capital to a company that you should pay tax on your own capital contribution? I don't disagree with anything you have written in the post I am replying to. But the money you get from selling your rights rather than executing them is not a cash distribution from ANZ. It is cash being paid for an asset (in this case your 'right') on behalf of someone else (the third party that bought your rights).

SNOOPY

Thanks Snoopy. Your post is logical.

I checked the IRD site and the 2013 Taxation Act amended the definition of a dividend. The amendment specifically excluded the premium paid from a book build process for the reason you explained.
https://www.taxtechnical.ird.govt.nz...end-definition
Premiums paid under bookbuild arrangements

[Grimy]

I've taken up my rights. Seemed a reasonable deal at $20.81

[Biscuit]

I've taken up my rights. Seemed a reasonable deal at $20.81

Me too, seems a fair price to me.

[tommy_d]

Me too, seems a fair price to me.

me too, can't see it being a big deal either way though

[theace]

Current have shares on the NZX, option to buy on ASX or NZX. Are there any pros or cons one way or other? Thanks.