Why are taxable bonus issues necessary?
Each Fund of the Scheme is a listed portfolio investment entity that pays tax at the corporate tax rate of 28%. When a Fund pays tax it generates imputation credits. These credits can be attached to ordinary distributions paid by the Fund and may also be attached to taxable bonus issues.
Due to the way New Zealand’s income tax legislation operates, a Fund may generate more imputation credits than can be attached to the ordinary distributions paid by that Fund to unitholders. Therefore, to ensure investors benefit from the full amount of imputation credits available, the Manager has determined that those excess credits should be distributed periodically by the relevant Funds via taxable bonus issues.
For more information on how the Funds are taxed, see the ‘Other Material Information’ document on the offer register at disclose-register.companiesoffice.govt.nz
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