IRD ruling delays ports payment

By DANIEL RIORDAN

Ports of Auckland says it does not expect to make its $132 million capital repayment to shareholders before April.

The company had indicated at its annual meeting in October that it hoped to make the repayment by the end of this year, but it said delays in obtaining the necessary approvals from Inland Revenue had pushed back the timeframe.

The company is seeking a binding ruling from the IRD on whether the proposed return of capital gives rise to a dividend.

If the amount returned does not exceed the company's available subscribed capital (ASC) it will be treated as a return of capital rather than a dividend for income tax purposes.

However, if the binding ruling application is unsuccessful, the company's ASC is likely to be calculated at $120 million.

The difference would be treated as a dividend.

Full imputation credits will be attached to any dividend portion.

The company now hopes to have a binding ruling by February, call a special meeting of shareholders in March, and return the capital in April by cancelling one in every five shares.