Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Recoveries

CG 4: Receipts for expenditure or loss from insurance, indemnity, or otherwise

You could also call this:

“Money received to cover expenses or losses you claimed as tax deductions”

You might get money back for something you spent or lost. This can happen if you have insurance, someone promises to pay you back, or in other ways. If you were allowed to take money off your taxes for what you spent or lost, and you get some money back for it, you might need to count that money as income.

Here’s how it works:

You can only count this money as income if it’s not already counted as income somewhere else in the tax rules. The amount you count as income can’t be more than what you took off your taxes earlier.

You need to include this money as income in your tax return. You do this in the tax year when you spent the money or had the loss. But if you get the money back later, you include it in the tax year when you receive it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512836.

Topics:
Money and consumer rights > Taxes
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Part C Income
Recoveries

CG 4Receipts for expenditure or loss from insurance, indemnity, or otherwise

  1. This section applies when—

  2. a person is allowed a deduction for expenditure or loss; and
    1. the person derives an amount relating to the expenditure or loss, whether through insurance, indemnity, or otherwise; and
      1. the amount, to the extent of the deduction, is not income of the person under any other provision of this Act.

        1. The amount derived is, to the extent of the deduction, income of the person.

        2. The income is allocated to the later of—

        3. the income year in which the expenditure or loss is incurred:
          1. the income year in which the amount is derived.

            Notes
            • Section CG 4: replaced (with effect on 4 September 2010), on , by section 12(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).