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Income Tax Act 2007

Deductions - Forestry expenditure

DP 1: Expenditure of forestry business

You could also call this:

"Claiming expenses for your forestry business in New Zealand"

Illustration for Income Tax Act 2007

You can claim a deduction for expenses related to your forestry business in New Zealand. This includes things like administrative costs, interest on loans, and money spent on planting or maintaining trees. You can also claim deductions for things like fertiliser, disease control, and repairing equipment used in your forestry business. You can claim deductions for repairing or maintaining land improvements, like access tracks, used mainly for your forestry business. You can also claim the cost of standing timber that is lost or destroyed. Although timber is considered revenue account property, you claim these deductions under a different section of the law, namely section BD 4(2). This section has some special rules that override other limitations. You still need to meet the general permission and other limitations to claim these deductions. You should look at section EA 2(2) and section BD 4(2) to understand how this works.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513976.

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DP 2: Plant or machinery, or

"Deductions for machinery used in forestry businesses"

Part DDeductions
Forestry expenditure

DP 1Expenditure of forestry business

  1. A person carrying on a forestry business on land in New Zealand is allowed a deduction for expenditure that they incur on—

  2. administrative overheads, rates, rent, insurance premiums, or other expenses of the same kinds:
    1. interest on money borrowed for the purposes of the business and employed as capital in the business:
      1. planting or maintaining trees on the land:
        1. applying fertiliser after the planting of the trees:
          1. disease control, pest control, or weed control (excluding releasing):
            1. repair or maintenance of plant, machinery, or equipment used by the person mainly in—
              1. planting or maintaining trees on the land; or
                1. preparing or otherwise developing the land for the person’s forestry operations:
                2. repair or maintenance of land improvements, other than trees, effected on the land and used by the person mainly in the business:
                  1. the construction to or on the land of access tracks that are—
                    1. constructed for a specific operational purpose; and
                      1. used for no longer than 12 months after construction:
                      2. the cost of standing timber that is lost or destroyed.

                        1. Although timber is revenue account property, a deduction for expenditure described in subsection (1) is not allocated under section EA 2(2) (Other revenue account property) but under section BD 4(2) (Allocation of deductions to particular income years).

                        2. 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 DP 1 list of defined terms forestry business: inserted (with effect on 1 April 2008), on , by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).