What are disallowed transfers?
According to the rules set out in the Income Tax Act 2007 on the transfer of tax pooling funds, Inland Revenue may decline transfers on the following grounds:
- If tax pooling funds (for expected liability) were transferred before a notice of assessment was issued by IR
- If the request for tax pooling funds is made outside of the legislative 75-day tax pooling window (for the relevant terminal tax date) for the tax year
- If the reassessed tax was transferred after 60 days from the date on which the Commissioner issued the notice of assessment.
- If tax pooling funds for open income years are more than their finalised assessment at IR
- If the return filing requirements for prior tax years have not been met
If IR has declined a transfer, our support team/account manager will contact you.
What is a resubmission?
Resubmission: income tax
If Inland Revenue disallows a transfer under the above points, we can resubmit these funds within 75 days of the terminal tax date, if the below criteria are met:
- The return filing requirements for the prior tax year(s) have been met or completed
- Where the current tax return has not yet been filed, but the taxpayer has purchased funds for an expected liability, they can use tax pooling, provided they have met all their prior year income tax return filing requirements and complied with their provisional tax obligations.
Resubmission: Closed income years (re-assessed) & other tax types
If Inland Revenue has disallowed a transfer for reassessed tax, we can resubmit these funds within 60-days from the date on which the Commissioner issued the notice of assessment.
What are amendments?
The below information can be found in the Tax Information Bulletin, Vol 23, No 8 issued October 2011. Please see page 53.
The Commissioner will continue to consider any such request to amend errors on a case-by-case basis, considering how the error arose, why it arose and whether the error correction is possible under the tax pooling rules.
Errors that the Commissioner can correct on a schedule include:
- a taxpayer’s IRD number was entered incorrectly by mistake
- the tax year or period was entered incorrectly
- an amount was transposed or entered incorrectly
Sufficient evidence will need to be provided by the taxpayer and/or tax pooling intermediary to satisfy the Commissioner that an error has occurred and that the Commissioner can correct this in line with the tax pooling rules.
Situations that are not considered to be errors include:
- a taxpayer advising the intermediary of the wrong effective date and/or amount of a transfer
- a tax pooling intermediary making a tax pooling transfer request outside of the legislative timeframes (60, 75 or 76 days, as applicable)
- after submitting a transfer request and before Inland Revenue processes it, the underlying commercial contract is altered (either by using different funds or altering the effective dates of the funds on the schedule)
- a taxpayer changing their mind as to any aspect of their tax pooling transfer after it has been received by Inland Revenue
- a taxpayer choosing to use purchased tax pooling funds instead of their own deposited funds or vice versa