INCOME TAX

Evening Post, Volume CXVIII, Issue 90, 13 October 1934, Page 10

INCOME TAX

UNWELCOME SURPRISE

OUTSIDE DIVIDENDS

ASSESSED

Income tax assessment notices are now being delivered in Auckland. The method of assessing dividends from British companies, such as the National Bank of New Zealand, the Union Bank of Australia, and the Bank of Australasia., comes as an unwelcome surprise to many taxpayers, states the "New Zealand Herald." Instead of accepting the amount received in New Zealand currency, the office of the Commissioner of Taxes is adding the amount paid in British income tax. This, in some cases, is paid by the company, or bank, before declaring the dividend; in others, the dividend is declared and the British income tax deducted before payment to the shareholder. In all cases the amannt of the British income tax is now being added to the New Zealand income tax assessment, as if it had been received by the shareholder. Thus a good deal of trouble is being taken to swell the amount of income which is not in the ordinary sense taxable. By this increase of assessment, however, the Commissioner of Taxes increases the rate at which the taxable income is taxed. Also, in some eases, the personal exemption allowed against assessable income is reduced.