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Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 6: Interest: not capital expenditure

You could also call this:

“Interest payments can be claimed as a deduction, even if related to capital spending”

You are allowed to claim a deduction for any interest you have paid. However, this doesn’t apply if you’re not allowed to claim a deduction for that interest under section DB 1.

This rule about interest deductions overrides the capital limitation. This means you can claim interest even if it’s related to capital expenditure. But remember, you still need to meet the general permission for deductions, and the other general limitations still apply.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513584.

Topics:
Money and consumer rights > Taxes
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“Deducting costs when borrowing money for business investments”

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“Companies can usually deduct interest costs without needing a direct link to income”

Part D Deductions
Specific rules for expenditure types

DB 6Interest: not capital expenditure

  1. A person is allowed a deduction for interest incurred.

  2. Subsection (1) does not apply to interest for which a person is denied a deduction under section DB 1.

  3. Repealed

  4. This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply.

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Notes
  • Section DB 6(3) heading: repealed (with effect on 30 June 2009), on , pursuant to section 69(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section DB 6(3): repealed (with effect on 30 June 2009), on , by section 69(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).