The IRD produce a list of various currencies exchange rates, including NZD/AUD - mid-month rates as supplied by Bloombergs. Usually available on IRD website around April/May.
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more information about this is here:
http://www.ird.govt.nz/business-inco...onvert-nz.html
From personal experience - the IRD is happy if you use their tables, but they seem to be happy as well if you use the "official" exchange rates as published by the dividend payer (e.g. ANZ would publish their exchange rate for NZ paid dividends). Important is just that you use for the whole tax year the same method - i.e. you are not allowed to use one method for one dividend payment and the other method for the other dividend payment.
Still easier obviously if you own NZX listed ANZ shares ... you are paid in NZD (typically including some NZ imputation credits), and this are the data you give IRD.
Discl: not a tax expert, but it worked so far for me (using the exchange rate announced by the respective Australian company when paying dividends) ....
Thanks BlackPeter and macduffy, really helpful.
Huxley, ANZ pay dividends with both Australian Franking Credits and New Zealand Imputation credits attached. If you are a New Zealand Taxpayer, you must disregard the Australian franking credits. The cheque ANZ put into your account is a net amount.
For a New Zealand taxpayer you must calculate your gross income by adding the net amount deposited in your bank account to the New Zealand imputation credits paid. (Note this means that in general for a fixed number of shares, the gross income for a New Zealand taxpayer is not the same as the gross income for an Australian taxpayer).
In an IR3 form (FY2015), The NZ imputation credits should be claimed under question 14 (Did you have any New Zealand dividends paid..?). The gross income however should be declared under question 17 (Did you receive any overseas income?)
Because the income for New Zealand shareholders is not fully imputed, you will generally have a 'wash up' amount of extra tax on your ANZ dividends to pay at a later date.
HTH
SNOOPY
discl: ANZ Shareholder
Just to add to Snoopy's post, ANZ's dividend advice states "... your NZ gross income will include the aggregate of the Dividend Amount and the NZ Imputation Credit which should be included in your income tax return." Both amounts are expressed in the dividend advice in NZD.
However, ANZ dividends subject to the Dividend Reinvestment Plan don't show the Dividend Amount in NZD, but in AUD - this amount is subject to reinvestment based on the AUD shareprice - as defined. The NZ Imputation Credit is shown in NZD and the advice includes details of forex rates applicable to the dividend - AUD/NZD and AUD/GBP. Definition of NZ gross income is as above.
Disc: Holding both
As Macduffy has said, the amounts printed on your dividend statements (currency expression aside), are the same whether you take the dividend as cash or whether you choose to reinvest in more shares via the drp. Thus the tax consequences, depending on which path you choose, are also the same.
SNOOPY
Great thanks Snoopy. One last question (maybe not:) - in the interim dividend I received in July for my nzx.anz shares, there was no mention of imputation credits. At that stage, I had 1227 shares. The payment rate was .86 cents as you know, and the total gross/net amount was listed as $1,055 The franking credit is listed (no good to us I guess) at $452.
I think I might be missing something here, but how do I know what the imputation credits are? Thanks in anticipation.
Looking on the NZX site you should have received 86c ps (AUD) dividend with a 10c per share imputation credit.
https://www.nzx.com/markets/NZSX/sec.../ANZ/dividends
cool thanks, that's how I'll calculate it then.