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Income Tax Act 2007

Deductions - Forestry expenditure

DP 9: Cost of acquiring timber: forestry business on land acquired from the Crown, Maori owners, or holding company

You could also call this:

“How to calculate the cost of timber when buying forested land from specific sellers”

If you are a forestry company and you buy land with standing trees from the Crown, Maori owners, or your holding company, there are special rules about how much you can say you paid for the trees.

When you buy the land from the Maori Trustee or a trustee for a Maori owner, it’s treated as if you bought it from the people who actually own the land. The same goes for land you buy from a Maori incorporation - it’s treated as if you bought it from the members of that incorporation.

The amount you can say you paid for the trees is whichever is less:

  1. How much the seller paid for the trees when they first got them, or
  2. The amount described in section CB 25(3) of this law.

This rule helps figure out how much you can deduct from your taxes for the cost of the trees.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513995.

Topics:
Money and consumer rights > Taxes
Environment and resources > Farming and fishing
Māori affairs > Māori land
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DP 8: Forestry business on land acquired from the Crown, Maori owners, or holding company: no deduction, or

“No tax deduction for forestry businesses paying interest on certain Crown or Māori land loans”

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DP 9B: Treaty of Waitangi claim settlements: rights to take timber, or

“Treatment of new timber rights after cancelled rights in Treaty settlements”

Part D Deductions
Forestry expenditure

DP 9Cost of acquiring timber: forestry business on land acquired from the Crown, Maori owners, or holding company

  1. This section applies when a forestry company acquires land with standing timber on it from a seller who is the Crown, the Maori owners, or a holding company of the forestry company.

  2. For the purposes of subsection (1),—

  3. land disposed of to the forestry company by the Maori Trustee or by a trustee for a Maori owner is treated as if it had been disposed of by the beneficial owners:
    1. land disposed of to the forestry company by a Maori incorporation is treated as if it had been disposed of by the members of the incorporation.

      1. The cost to the forestry company of acquiring the timber is the lesser of—

      2. the cost of the timber to the seller at the date of the disposal; and
        1. the amount described in section CB 25(3) (Disposal of land with standing timber).

          Compare
          Notes
          • Section DP 9 heading: amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
          • Section DP 9(1): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
          • Section DP 9(2)(a): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
          • Section DP 9(2)(b): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
          • Section DP 9(3)(a): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
          • Section DP 9 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).