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Income Tax Act 2007

Deductions - Farming and aquacultural business expenditure

DO 12: Improvements to aquacultural business

You could also call this:

"Rules for claiming tax deductions on improvements to your aquaculture business"

Illustration for Income Tax Act 2007

You carry on an aquacultural business in New Zealand. This business can be fish farming under a licence issued under the Freshwater Fish Farming Regulations 1983, or mussel farming, or rock oyster farming, or scallop farming, or sea-cage salmon farming. You make an improvement for the business, like one described in schedule 20, parts B to F. You own the improvement and you are allowed a deduction for the expenditure. This expenditure must be incurred on making the improvement, and it must be of benefit to the business. You do not own the improvement, but you are still allowed a deduction for the expenditure you incurred. The amount of the deduction is calculated using a formula. The formula uses the schedule 20 percentage and the diminished value of the improvement. The schedule 20 percentage is the percentage set out opposite the description of the improvement in schedule 20, parts B to F. This section has rules that override other rules. You must still satisfy the general permission and other general limitations. You can find more information about this in the Income Tax Act 2007.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513968.

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Part DDeductions
Farming and aquacultural business expenditure

DO 12Improvements to aquacultural business

  1. This section applies when—

  2. a person carries on an aquacultural business in New Zealand; and
    1. the aquacultural business is—
      1. fish farming under a licence issued under the Freshwater Fish Farming Regulations 1983; or
        1. mussel farming; or
          1. rock oyster farming; or
            1. scallop farming; or
              1. sea-cage salmon farming; and
              2. an improvement described in any of schedule 20, parts B to F (Expenditure on farming, horticultural, aquacultural, and forestry improvements) is made for the purposes of the business.

                1. A person who owns the improvement is allowed a deduction for expenditure to which all the following apply:

                2. it is incurred on making the improvement; and
                  1. it is incurred by the person or by another person; and
                    1. it is incurred in the 1995–96 income year or in a later income year, not including the income year in which the person ceases to carry on the business, the income year being the income year of the person who owns the improvement; and
                      1. it is incurred in developing the business; and
                        1. it is of benefit to the business in the income year in which the person is allowed the deduction.

                          1. A person who does not own the improvement is allowed a deduction for expenditure to which all the following apply:

                          2. it is incurred on making the improvement; and
                            1. it is incurred by the person; and
                              1. it is incurred in the 1995–96 income year or in a later income year, not including the income year in which the person ceases to carry on the business; and
                                1. it is incurred in developing the business; and
                                  1. it is of benefit to the business in the income year in which the person is allowed the deduction.

                                    1. The amount of the deduction is calculated using the formula—

                                      schedule 20 percentage × diminished value.

                                      Where:

                                      • In the formula,—

                                      • schedule 20 percentage is the percentage set out opposite the description of the improvement in any of schedule 20, parts B to F:
                                        1. diminished value is the diminished value of the improvement.

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

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