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CX 52: Refund from environmental restoration account
or “Refunds from environmental restoration accounts are not taxable income”
You could also call this:

“Adjustments to loan amounts due to changes in New Zealand's inflation”

When you lend money, sometimes the amount you’re owed can change based on how prices in New Zealand go up over time. This is called an inflation-indexed loan.

If prices go up, the amount you’re owed might increase. The person who borrowed the money (the borrower) might add this extra amount to what they owe you. They do this by putting a credit in your account.

Sometimes, this credit is just making up for a time when prices went down, and the amount you were owed decreased. In this case, the government says you don’t have to count this credit as income when you do your taxes. It’s like the credit never happened, as far as your taxes are concerned.

Remember, this only applies when the loan amount changes based on New Zealand’s inflation, when the borrower credits your account, and when that credit is making up for a past decrease in what you were owed.

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Next up: CX 54: Share-lending collateral under share-lending arrangements

or “Rules for tax-free collateral in share-lending deals”
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Part C Income
Excluded income: Definitions

CX 53Credits for inflation-indexed instruments

  1. This section applies when—

  2. an amount payable to a person who is a lender for money lent is determined by a fixed relationship to 1 or more indices of general price inflation in New Zealand; and
    1. an amount on account of an increase in the amount payable is credited to the lender’s account by the borrower; and
      1. the credit represents a recovery of a decrease, previously debited in account, in the amount payable over a previous period.

        1. The credit is excluded income of the lender.

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