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Income Tax Act 2007

Income - Income from business or trade-like activities - Exclusions for business premises

CB 19: Business exclusion from sections CB 6 to CB 11

You could also call this:

“Selling business premises: when tax doesn't apply”

If you own a business, you don’t have to worry about sections CB 6 to CB 11 when you sell your business premises. This is true if you bought or built the premises mainly to run your business from there.

However, there’s an exception to this rule. If section CB 6(1) applies to your sale and you often buy and sell business premises, you can’t use this exclusion.

This rule can also apply to groups of people. A group means two or more people who use premises to run a substantial business. It doesn’t matter what kind of business they run. Also, there needs to be someone who has a lot of control over what all these people do in their businesses.

When we talk about ‘land’ in this section, we mean not just the building but also any land that’s set aside for the business to use. But this extra land can’t be bigger than what you need to reasonably run your business.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512452.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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CB 18: Residential exclusion from section CB 14, or

“Exemption for selling land bought for personal living to another person for the same purpose”

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CB 20: Business exclusion from sections CB 12 and CB 13, or

“Exclusion for businesses improving their own land”

Part C Income
Income from business or trade-like activities: Exclusions for business premises

CB 19Business exclusion from sections CB 6 to CB 11

  1. Sections CB 6 to CB 11 do not apply to a disposal of land by a person (person A) if—

  2. the land is the premises of a business; and
    1. person A acquired and occupied, or erected and occupied, the premises mainly to carry on a substantial business from them.

      1. The exclusion does not apply when—

      2. section CB 6(1) applies to the disposal; and
        1. person A has engaged in a regular pattern of acquiring and disposing of land described in subsection (1).

          1. For the purposes of subsection (2), person A includes a group of persons if the requirements of subsection (2C) are met.

          2. For the purposes of subsection (2B), a group of persons means 2 or more persons if—

          3. the persons occupy premises mainly to carry on a substantial business from them as described in subsection (1)(b), irrespective of the nature of any business carried on from the premises; and
            1. a person, whether or not they occupy premises as described in subsection (1)(b), has significant involvement in, or control of, the activities of all persons referred to in paragraph (a) (the occupiers). For the avoidance of doubt, if the person is able to direct, alone or as part of a group, the activities of the occupiers, they have significant involvement in, or control of, the activities of the occupiers.

              1. In this section, land includes land that—

              2. is reserved, with the premises, for the use of the business; and
                1. is of an area no greater than that required for the reasonable occupation of the premises and the carrying on of the business.

                  Compare
                  Notes
                  • Section CB 19(1): amended, on , by section 12(1)(a) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(1)(b): amended, on , by section 12(1)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(2) heading: replaced, on , by section 12(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(2): replaced, on , by section 12(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(2B) heading: inserted, on , by section 12(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(2B): inserted, on , by section 12(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(2C) heading: inserted, on , by section 12(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19(2C): inserted, on , by section 12(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                  • Section CB 19 list of defined terms group of persons: inserted, on , by section 12(3) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).