If you have been allowed a deduction for a bad debt and you later receive money for that bad debt, you need to count that money as income. This means you’ll need to include it when you report your income for tax purposes.
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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512834.
CG 2E: Remitted and other amounts: income apportionment, or
“Splitting special income among company group members after shared tax losses”
CG 4: Receipts for expenditure or loss from insurance, indemnity, or otherwise, or
“Money received to cover expenses or losses you claimed as tax deductions”
An amount received by a person for a bad debt for which the person has been allowed a deduction is income of the person.
