COLONIAL SUGAR COMPANY

Dominion, Volume 28, Issue 208, 31 May 1935, Page 14

COLONIAL SUGAR COMPANY

Taxation of Bonus Shares Interviewed yesterday Mr. E. Bucholz, president of the Stock Exchange Association of New Zealand, stated that it appeared that many shareholders had gained the impression from a recent report in the Press in reference to the bonus distribution of shares made by the Colonial Sugar Refining Company earlier this year, that the Income-Tax _ Department was demanding that the capital value of the shares received by each shareholder be shown in his income tax return and that such capital value would be subject to tax. For the purpose of ascertaining the exact position of Now Zealand shareholders, Mr. Bueholz discussed tlie matter with Mr. C. E. Dowland. Commissioner of Taxes, who explained that only that portion of the issue which was made out of undistributed profits, namely, onetTiird. was required to bo shown in (be tax return, and in any case such onethird did not carry income tax, but was only used to arrive in the assessment at the rate at which tax would be payable. Mr. Dowland explained that this was in accordance with a ruling he had received from the Crown Law Office, but that, as assessment notices did not go out until about November, if it was. found later that these shares were not income they would be omitted from the assessment both for income tax and unemployment tax.