By GEOFF SENESCALL
Contact Energy and Tower Corporation joined the raft of local corporates bringing forward their interim dividend payments before the tax rise comes into effect on April 1.
After this date the top personal tax rate rises from 33 per cent to 39 per cent for those earning over $60,000
a year.
To qualify at the 33 per cent rate a company must send shareholders a cheque before April 1.
The last possible date for a company to announce a dividend is therefore March 13.
This is because under stock exchange listing rules a company must give 10 working days' notice of the cutoff date for when shareholders are eligible to receive the dividend.
That date must be a Friday.
According to the head of research for Credit Suisse First Boston, Rob Bode, any company that has imputation credits and is shareholder friendly should be looking at this.
"Many companies are overcapitalised and have imputation credits available. It makes sense that they utilise these ahead of the lift in rates," he said.
"They can either do this by way of special dividend, which is deemed to be non-recurring, or by adjusting the interim dividend ratio above what it has been historically."
A reason for not making a payout was the retention of funds for an acquisition.
Mr Bode noted that a lot of companies had already acted. Among the big companies yet to move are Auckland International Airport and Brierley Investments.
Institutions and overseas investors are not affected by the rate increase.
Contact Energy has the largest register of New Zealand shareholders following its float last year by the Government.
The company said yesterday that: "While the interim dividend would normally be paid in June, the company has determined to make the payment earlier this year in order to increase the efficiency of imputation credits prior to the tax changes that take effect on April 1, 2000."
However, the company said it was its intention to make its final dividend payment for the year in December.
