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Income Tax Act 2007

Deductions - Government grants, funding, and compensation

DF 2: Repayment of grant-related suspensory loans

You could also call this:

“Getting money back when repaying certain loans linked to grants”

You can get money back for some payments you make to repay a grant-related suspensory loan. This applies when the loan is connected to a payment covered by section DF 1(2). You can claim this money back in the first year you have to start repaying the loan.

If you need to pay back some or all of a grant-related suspensory loan, and section DF 1(3) and (4) apply to the loan, you can also get money back for wear and tear on an item. The amount you can claim is what you would have been able to claim if section DF 1(3) and (4) hadn’t applied.

When working out how much wear and tear you can claim for the item in this year and future years, you need to think about:

  1. How much you’re claiming under this rule
  2. How much you’ve already claimed for wear and tear on the item
  3. How much you spent to buy, build, set up, or improve the item

This rule adds to the general permission and overrides the capital limitation for the amount described in the first paragraph. 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=DLM1513886.

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Money and consumer rights > Taxes
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“How government grants affect business tax deductions”

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DF 3: Identifying expenditure for purposes of sections DF 1 and DF 2, or

“How to understand the purpose and repayment of grant-related suspensory loans”

Part D Deductions
Government grants, funding, and compensation

DF 2Repayment of grant-related suspensory loans

  1. A person is allowed a deduction for the amount of a repayment that they are required to make of some or all of a grant-related suspensory loan to the extent to which the amount relates to a payment to which section DF 1(2) applies.

  2. The deduction is allocated to the income year in which repayment is first required.

  3. If a person is required to repay some or all of a grant-related suspensory loan, then, to the extent to which section DF 1(3) and (4) apply to the loan,—

  4. the person is allowed a deduction for an amount of depreciation loss for the item; and
    1. the amount of depreciation loss is the total of the amounts of depreciation loss for the item for which the person would have been allowed a deduction if section DF 1(3) and (4) had not applied.

      1. For the purpose of quantifying the amount of depreciation loss for the item in the income year and in later income years, the following matters must be taken into account:

      2. the amount of the deduction under subsection (3); and
        1. the total of the amounts of depreciation loss for the item for which the person has been allowed a deduction; and
          1. the person’s expenditure on acquiring, constructing, installing, or extending the item.

            1. This section supplements the general permission and overrides the capital limitation for the amount described in subsection (1). The other general limitations still apply.

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