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Income Tax Act 2007

Deductions - General rules

DA 1: General permission

You could also call this:

“General rule for deducting expenses and losses from income”

You can deduct money you’ve spent or lost, including depreciation, from your income. This is allowed if you spent the money or had the loss while earning income that can be taxed or income that isn’t taxed, or both. You can also deduct money if you spent it or lost it while running a business to earn taxable income, non-taxable income, or both.

This rule is called the ‘general permission’. It means you’re generally allowed to make these deductions.

However, there’s another rule called Section GB 33 that might change how the general permission works for depreciation losses in some cases.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513555.

Topics:
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DA 2: General limitations, or

“Rules that limit when you can claim tax deductions”

Part D Deductions
General rules

DA 1General permission

  1. A person is allowed a deduction for an amount of expenditure or loss, including an amount of depreciation loss, to the extent to which the expenditure or loss is—

  2. incurred by them in deriving—
    1. their assessable income; or
      1. their excluded income; or
        1. a combination of their assessable income and excluded income; or
        2. incurred by them in the course of carrying on a business for the purpose of deriving—
          1. their assessable income; or
            1. their excluded income; or
              1. a combination of their assessable income and excluded income.

              2. Subsection (1) is called the general permission.

              3. Section GB 33 (Arrangements involving depreciation loss) may apply to override the general permission in relation to an amount of depreciation loss.

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