The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, MAY 18, 1932. TAX ON INTEREST.

Hokitika Guardian, 18 May 1932, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, MAY 18, 1932. TAX ON INTEREST.

Peculations concerning the stamp duty on receipts of interest from Government and local body securities imposed by the National Expenditure Adjustment Act passed during the emergency session, are published in a special Gazette. Holders of securities are obliged to undergo intricate formalities in complying with the terms of the Act, and an explanation of the requ.i--mcuts was made in a statement issued by the Minister of Finance, Hon. W. Downie Stewart. Stamp duty is payable on interest payable in New Zealand on Government and local authorities’ securities which were issued on or before May 9, the statement reacts. The date of execution of the securities by the issuing authority is deemed to .be the date of issue. The interest on moneys placed on deposit with locnl authorities on or before May 9 is subject to stamp duty, but interest on securities issued after May 9 is not. Interest subject to tne special stamp duty is exempt from the ordinary 2d receipt duty. The special stamp duty, however, is not payable, on interest which is due before May 14, but duty is payable.on all interest clue for payment in New Zealand on and after that date. In this connection it may be mentioned that interest paid out of New Zealand merely for the convenience of bond holders and not pursuant to any contractual right is liable for stamp- duty. Further, if a person entitled to have his interest paid overseas elects to take it in New Zealand, this interest is liable to stamp duty. This duty is payable when interest coupons, warrants, or cheques are presented for payment, and under the regulations it is unlawful for any person to pay any interest until the duty on it has been paid. The rate of the special stamp duty is 3d for' every 2s 6d or fractional part of 2s 6d included in the amount of the interest coupon., warrant, or cheque, as the case may be. tlt is provided, however, that where a number of coupons or warranto relative to the same loan are presented by the one holder at the same time and the procedure laid down in the regulations is followed, the duty shall he payable on the total amount of interest, thereby avoiding payment of -duty on a number of ffactions of 2a Gd. For the convenience of homers of securities—and particularly large holders.—.provision has been made in the regulations for the payment of the stamp duty otherwise than by means of adhesive stamps affixed to ons or warrants .and cancelled by t>.e holder of them. Accordingly it is open to the holder of any coupons or warrants affected to pay the special duty in the following ways:—(a) To purchase stamps for the required amount, and affix the stamps to the back of each coupon or warrant before presenting it for payment, j If there is not sufficient room on the coupon both the coupon and the stamps may be affixed to a piece of paper, (b) In the case of interest on Government securities where the coupons or warrants are presented at any, postal money order office, the duty may be paid by means of stamps or in cn.sh out of the' proceeds of the interest payment. If the latter method is preferred, it is necessary for the holder, before presenting his coupons, to fill in a. simple form obtainable at the money order office. Under the regulations the fact that the interest is received by the person entitled to it is conclusive proof that the stamp duty lifts been paid, so it is not necessary to obtain a receipt for the stamp duty paid, (c) In cases where coupons ot warrants for interest' on either Government or local body loans are presented for payment at a bank, the duty can be paid by means of adhesive (stamps or, following the procedure set out under (b), the same return can he obtained at the bank and filled in, and the duty can then be paid oy lodging the required amount to the credit of the Bank of New Zealand. Where interest on any local body loan is payable at any bank other than the Bank of New Zealand, it will he necessary for the amount of duty to be first lodged with the Bank of New Zealand, and the bank receipt handed in w-'th the return (in duplicate) and the coupons, at the bank where interest is payable.