IS 21/05
Issued
02 Jul 2021

Non-cash dividends

This interpretation statement considers when a transfer of company value from a company to a shareholder is treated as a dividend for tax purposes.  It focuses on the types of non-cash transactions that are often entered into between small and medium-sized companies and their shareholders.

Tax Information Bulletin Vol 33 No 7 – August 2021

Income Tax Act 2007 – sections CB 1B – CB 1E, subpart CD (sections CD 4 – CD 7, CD 7B, CD 8, CD 11, CD 20, CD 22, CD 23, CD 23B, CD 24 – CD 29, CD 31, CD 32, CD 38 – CD 42), sections CE 1, CE 2, CE 5, CW 15, CX 2, CX 3, CX 6, CX 9, CX 10, CX 12, CX 13 – CX 18, Part D (sections DA 1, DB 1, DC 3B), GB 1, GB 23, GB 25, HA 14, HA 15, HB 1, OB 60, RD 26, RD 41, RD 54, YA 1 (“effective look-through interest”, “working owner”)

Abbott v Philbin (Inspector of Taxes) [1960] 2 All ER 763 (HL)
Campbell v CIR [1968] NZLR 1 (HC)
Case V9 (2001) 20 NZTC 10,101 (TRA)
Christchurch Press Co Ltd v CIR (1993) 15 NZTC 10,206
Dawson v CIR (1978) 3 NZTC 61,252 (SC)
Heaton (Inspector of Taxes) v Bell [1969] 2 All ER 70 (HL)
Mersey Docks and Harbour Board v Lucas (1883) 8 AC 891, (1883) 2 TC 25 (HL)
Stagg v CIR [1959] NZLR 1,252 (HC)
Tennant v Smith (1892) 3 TC 158 (HL)