Frequently asked questions

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FAQs

What is Infratil's dividend policy?

Infratil's Board determines dividends having regard to the overall financial position of Infratil, the total net surplus for the relevant period and the need to ensure that imputation credits are passed to shareholders. It is Infratil's policy not to pay unimputed dividends as this could give rise to shareholders being obliged to pay additional tax.

Do Infratil dividends carry imputation credits?

It is Infratil's policy that all dividends should be fully imputed.

Can I get my dividends direct credited?

Most of Infratil's shareholders have their dividends and Bond interest coupons direct credited to their bank accounts.

To arrange for your dividends/interest to be direct credited, please contact Infratil's registry and notify them as to the account you want the sums credited to and your shareholder details:

Link Market Services, PO Box 91976, Auckland 1142 Telephone +64 (9) 375 5998

Email Address: enquiries@linkmarketservices.co.nz

Does Infratil have a dividend reinvestment scheme?

Yes this was announced in April 2010. When a dividend is declared by Infratil it will be announced if the Plan will apply (i.e Infratil can elect to paying only cash dividends). Infratil has not applied the Plan to dividends since 2013. Please click here to read details of the scheme.

Could you give a brief summary of the New Zealand tax treatment of investors?

Capital gains on equity securities

Capital gains on equity securities are generally not taxed in New Zealand unless an investor is in the business of dealing in the securities or had the dominant purpose of resale for profit when the security was purchased.

Resident Withholding Tax (RWT) Applies to New Zealand Resident Investors

Except for investors that hold a valid exemption certificate issued by the IRD, RWT will be deducted at 33% if an IRD number has not been provided to the bond/share registry. As previously mentioned, investors may have RWT deducted at their marginal tax rate if an IRD number has been provided and the relevant tax rate has been provided (the rates of RWT allowed are either 10.5%, 17.5%,  28%, 30% or 33%) 

Non-Resident Withholding Tax (NRWT) Applies to Non-New Zealand Resident Investors

The rate of NRWT applying to dividends depends on whether the dividends have imputation credits attached.  To the extent that dividends paid to non-resident shareholders are “fully imputed” (i.e. 28 cents of imputation credits are attached for every 72 cents of cash dividend), Infratil will not be required to deduct any non-resident withholding tax (NRWT) from the dividends (as long as the shareholder holds less than 10% of the total Infratil shares on issue).  It is Infratil’s policy that all dividends should be fully imputed. 

The rate of NRWT applying to interest varies depending on the resident country of the investor. It is usually either 10% or 15%. However, Infratil registers all of its bonds under the approved issuer levy (AIL) regime, which is an alternative to deducting non-resident withholding tax (NRWT).  Due to a law change effective from 7 May 2012, all coupon interest paid by Infratil to non-resident bondholders qualifies to have AIL deducted at a rate of 0% (prior to 7 May 2012 the rate was 2%).  In practice, this means that there are no longer any taxes withheld or levies imposed on coupon interest paid by Infratil to non-resident bondholders.  

Imputation credits

The New Zealand recipient of dividend income may offset their New Zealand income tax obligation on that income if imputation credits were attached to the dividend. Imputation credits reflect income tax paid by the company and may be attached up to the level of corporate tax paid (28%). Non-New Zealand recipients may also benefit from imputation credits as, to the extent dividends are fully imputed and the shareholder holds less than 10% of the total Infratil shares on issue, no NRWT will be deducted as described above.

Is there anything I can do to change the rate at which New Zealand Resident Withholding Tax (RWT) is deducted from dividends or interest paid to me?

If you provide your IRD number to the share/bond registry (Link Market Services at: PO Box 384, Ashburton), you can ask them to deduct RWT from your interest at either 10.5%, 17.5%,  28%, 30% or 33% as appropriate. 

The registry is required to deduct RWT from dividends at the flat rate of 33% (less imputation credits attached).

Alternatively, if you have a valid exemption certificate you should send it to the registry and it will not deduct any New Zealand RWT from your interest or dividends.

As a non-New Zealand resident bondholder, what New Zealand tax do I pay on interest received from the Bonds?

Infratil registers all of its bonds under the approved issuer levy (AIL) regime, which is an alternative to deducting non-resident withholding tax (NRWT).  Due to a law change effective from 7 May 2012, all coupon interest paid by Infratil to non-resident bondholders qualifies to have AIL deducted at a rate of 0% (prior to 7 May 2012 the rate was 2%).

In practice, this means that there are no longer any taxes withheld or levies imposed on coupon interest paid by Infratil to non-resident bondholders. 

What do imputation credits mean to New Zealand resident shareholders?

Imputation credits effectively match the New Zealand income tax paid by the company. To avoid double taxation of dividends, imputation credits can be transferred to shareholders to reduce or eliminate the tax shareholders have to pay on dividends.

Full imputation means providing 28 cents of imputation credits for every 72 cents of cash dividend that is received in the hand by the shareholder. At this level of imputation all resident shareholders who pay income tax at the rate of 28% or less will not have to pay any further New Zealand income tax. New Zealand resident shareholders who pay tax at the highest New Zealand tax rate of 33% will be required to pay a further 5 cents for each $1.00 of gross income (i.e. to leave them with a net 67 cents of cash in the hand). This additional tax will be  covered by RWT that Infratil is required to deduct from the dividend. 

If less than 28 cents of imputation credits were provided (with every 72 cents of cash dividend), the dividend would not be “fully imputed” and all resident shareholders that have a marginal tax rate that is higher than the imputation credits attached would also be required to pay additional New Zealand income tax.  Again, this additional tax will be covered by RWT deducted by Infratil from the dividend.  In any event, it is Infratil’s policy that all dividends should be fully imputed. 

What do imputation credits mean to non-New Zealand resident shareholders?

To the extent that dividends paid to non-resident shareholders are “fully imputed” (i.e. 28 cents of imputation credits are attached for every 72 cents of cash dividend), the company will not be required to deduct any non-resident withholding tax (NRWT) from the dividends (as long as the shareholder holds less than 10% of the total Infratil shares on issue).

Whether New Zealand imputation credits reduce overseas shareholders tax liability in countries other than New Zealand depends on the tax laws of the relevant country. You should ask your taxation adviser for specific advice.

Can I trade (buy or sell) Infratil Infrastructure Bonds? What is the price?

All of the Infratil Bonds are listed on the NZX and most trade on a regular basis. Mainly however investors hold to maturity so trading is much less than for Infratil’s shares.

This website has bids/offers and the last price of listed bonds, including all those issued by Infratil.

The secondary market price tends to reflect the number of buyers and sellers and will tend to fluctuate over time.

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