Interest / Dividend Income

Interest Income 

If you receive interest RWT will usually be deducted from this income by the payer and sent to the IRD.                

RWT is deducted from interest on the day the interest is paid, regardless of when the interest was earned. So if interest is paid on or after 1 April 2010, it will be liable for RWT at the rates from 1 April 2010 (eg 21% rather than 19.5%). If paid on or after 1 October 2010 it will be liable for RWT at the new rate (eg 17.5% rather than 21%).       

It is important that you choose the RWT rate appropriate to your level of taxable income. This ensures that the correct amount of tax is deducted from it. If you choose a rate that is too low, you will have a tax bill to pay at the end of the income year.       

You also need to make sure your interest payer has your IRD number.   

 

Partnerhsips

If the partnership's IRD number is given to the interest payer, you may choose any of the rates that would apply as if the account were held in a partner's name.   

For example, if the partnership has a company as a partner, the partnership can choose the rate that applies to companies. 

  

Dividends

Dividends are paid to the owners of shares in a company. Dividends are taxed at a flat RWT rate of 33%. Dividends from a listed PIE are not liable for RWT.