WAR LOAN

Dominion, Volume 34, Issue 9, 5 October 1940, Page 13

WAR LOAN

Minimum Subscription Requirements

MR. NASH’S STATEMENT

Basis Of Computation Explained

A statement in further explanation of the basis of the minimum subscription requirements recently announced for the current War Loan issue and briefij’ set out in the prospectus, was made by the Minister of Finance, Mr. Nash, yesterday.

“The minimum subscription for individuals is, in general, to be taken as the excess over £5O (calculated to the nearest multiple of £10) of the income tax which was payable in February last in respect of income derived during the year ended March 31, 1939,” Mr. Nash said. “In the case of companies the minimum subscription is the excess of the income tax (computed to the nearest multiple of £10) over £7O. Where persons are in receipt of exempt income (i.e., income not subject to income tax) the income tax is to be computed as if that income were assessable income (i.e., income subject to tax), and not as being income which is either wholly excluded from assessment or which is merely taken into account for tiie purpose of increasing the rate of tax payable. The exempt income to be taken into account in this way will include dividends from overseas companies (but not local companies) and other exempt income from abroad, interest from tax-free Government stock and from tax-free company debentures, and also farming income where the land used had an unimproved value of less than £3OOO. “In short, the exempt income includes all income that was subject to Social Security Charge, but whiclt was not assessable for income tax; and also all income derived from abroad and exempt from Social Security Charge because it had already borne a similar charge overseas; but does not include dividends from New Zealand companies. “■Where no income exempt from income tax was received the minimum subscription can be readily ascertained ■by deducting £5O or £7O, as the case may be, from the amount of income tax actually payable, and converting the balance to the nearest multiple of £lO. For example, if the income tax ordinarily due and payable in February last was £93 the minimum subscription would be £4O in the case of an individual and £2O in the case of a company. If the tax was £96 the amounts would be £5O and £3O respectively, “In cases where the income derived during the year ended March 31, 1939, consisted wholly or partly of exempt income (e.g., dividends and _ other exempt income from abroad, income from farming of land under £3OOO unimproved value, or tax-free interest), it will ibe necessary where the tux is likely to exceed £5O or £7O, as the case may ibe, to compute the amount of tax which would have been payable on the basis outlined above.

A General Guide. "To assist persons who are not conversant with income tax matters, more particularly farmers who were exempt from income tax in respect of 1939 farming income and l other persi as whose principal source of income w .is exempt, tiie .following table is set out as a general guide in connexion with the minimum subscription requirements :—

Total income derived from Approx. Amount of Alinimum Subscription: Persons all sources during the year Resident in New Zealand. ended Alarch 31, 1939. Married men supporting wife, or children under the (See note below.) age of 18 years, during the year ended Alarch 31,1939. Income Single AVife AVi e and AVife and AVife and AVife and (ifearned). person. only. 1 child. 2 children. 3 children. 4 children..

Minimum Suitscription, “These approximate minimum subscription figures would apply except iu the following cases: “(a) Where the total income included a substantial amount of dividends from companies incorporated in New Zealand. “(b) Where, in addition to allowances for wife and children as shown above, substantial'amounts would be allowable for income tax purposes in respect of life insurance premiums, etc. '■Small amounts in either case would not materially affect, the figures. Substantial amounts would reduce the minimum subscription. Taxpayers whose eases are not covered by this table ami who are not conversant with ilie basis of computation tire advised to consult an accountant or other person versed in taxation matters for guidance: or may apply by letter to the Commissioner of Taxes.”

£ £ £ £ £ £ £ GIO .. 10 — — —- — 700 .. 20 10 — — 30 20 10 — — — SOO .. -10 '30 20 10 — — 900 .. 50 40 10 30 20 10 1000 .. 70 GO 50 -10 40 30 1250 .. 120 110 1'10 90 SO iO 1500 ,. ISO 170 '■;o 150 .130 120 2000 .. Income 310 300 1 so 270 260 240 (if -unearned) 520 .. 10 — — — — — 600 .. 20 10 — —- — 650 .. 30 20 10 — — ■ 700 .. 40 30 20 10 ——• ■ 750 .. SOO .. 900 .. 5 000 .. 1250 .. 1500 .. 2000 .. 50 70 90 110 180 260 430 40 50 80 100 170 210 410 30 40 70 90 150 230 400 20 30 50 80 140 210 380 10 20 40 70 130 200 360 10 30 50 110 180 340