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This statement confirms the Commissioner's position in "AMP group demerger - tax implications for New Zealand shareholders" Tax Information Bulletin Vol 15 No 11 (November 2003).
On the basis of the information provided by AMP Limited ("AMP"), including the Explanatory Memorandum, and certain specific conditions advised to AMP, the Commissioner now confirms the following about the AMP demerger ("the Demerger").
A majority of the Cancellation Entitlements arising out of the cancellation of AMP shares will be excluded from being dividends for New Zealand tax purposes, by virtue of section CF 3(1)(b), for those AMP shares that are cancelled in whole. AMP has indicated that the following condition was not satisfied:
"All AMP shares cancelled as part of the Demerger will be ordinary listed shares issued by AMP, and will each be cancelled in whole, not in part."
Cancellation Entitlements, to the extent they are attributable to the partial cancellation of a share, will be dividends for New Zealand tax purposes. Some shareholders have had one share partially cancelled due to the formula used by AMP. It is estimated that each such New Zealand shareholder will on average have a tax liability between NZ$0.65 and NZ$1.31. Some AMP shareholders will have a figure much lower than this estimate.
The Commissioner will not seek to collect the tax liability from AMP's shareholders.
The Commissioner has also confirmed that the allotment of the HHG plc shares is not itself a dividend derived by AMP shareholders under section CF 2.