Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Income from business or trade-like activities - Exclusion for investment land

CB 25: Disposal of land with standing timber

You could also call this:

“Tax rules for selling land with trees”

This law is about what happens when you sell land that has trees growing on it. It says that when you sell such land, the money you get for the trees is counted as income.

However, there are some types of trees that this rule doesn’t apply to. These are:

  1. Trees that are just for decoration or aren’t the main feature of the land. You need a special certificate to prove this.

  2. Trees that are part of a forest where someone else has the right to use them. This right needs to be officially recorded.

  3. Trees where someone was given the right to take something from them (like fruit or wood) before 1 January 1984.

If your trees don’t fit into any of these special cases, then when you sell the land, the money you get for the trees will be counted as income.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512470.

Topics:
Money and consumer rights > Taxes
Previous

CB 24: Disposal of timber or right to take timber, or

“Selling timber or timber rights counts as income”

Next

CB 26: Disposal of certain shares by portfolio investment entities, or

“How portfolio investment entities handle income from selling certain shares and related dividends”

Part C Income
Income from business or trade-like activities: Exclusion for investment land

CB 25Disposal of land with standing timber

  1. This section applies when a person disposes of land with standing timber on it.

  2. This section does not apply when the standing timber is of 1 of the following kinds:

  3. trees that are ornamental or incidental, as evidenced by a certificate given under section 44C of the Tax Administration Act 1994; or
    1. trees in a crop subject to a forestry right, as defined in section 2 of the Forestry Rights Registration Act 1983, registered under the Land Transfer Act 2017; or
      1. trees subject to a right to take a benefit (in the form of a profit a prendre) granted before 1 January 1984.

        1. The amount that the person derives from disposing of the standing timber is income of the person.

        Compare
        Notes
        • Section CB 25(2)(b): amended, on , by section 250 of the Land Transfer Act 2017 (2017 No 30).