CA ANZ’s submission on the draft interpretation statement PUB00469 raises concern over Inland Revenue’s shift in interpreting whether an off-market share cancellation is in lieu of a dividend. CA ANZ believes the draft departs from the previous IS2966, which treated the rule as a rebuttable presumption, aligning with original legislative intent. CA ANZ calls for clearer reasoning behind the change and expanded guidance in several areas, including the application of the rule to redeemable preference shares, retained earnings, and group restructures.

CA ANZ recommends more detail on how the Commissioner will assess timing and parties involved in share cancellations and reissues, particularly under strategic restructures.

Additional recommendations include clarifying how the time bar applies to reassessments and whether partial returns of capital (up to available subscribed capital) can be treated as non-taxable. CA ANZ urges Inland Revenue to provide more practical guidance to reduce uncertainty and compliance costs, and to maintain consistency with long-standing policy and commercial practices.