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DS 2B: Expenditure when film or film right intended for disposal
or “Deductions for film expenses when planning to sell”
You could also call this:

“Repaying tax deductions for film reimbursement schemes when property is sold”

If you sell property under a film reimbursement scheme, you need to reduce the deductions you’ve been allowed or would be allowed under sections DS 1 or DS 2. You must reduce these deductions in the order you received them.

To figure out how much to reduce your deductions, you use a special calculation. You subtract the total amount of money you got from selling the property (not including film income) from your total deductions. If this number is less than zero, you reduce your deductions to zero.

The government can change your tax assessment at any time to make sure this rule is followed, even if it’s past the usual time limit for changes.

This rule doesn’t apply to deductions for expenses that are excluded under section DZ 11, which deals with film reimbursement schemes from before 30 June 2001.

If this rule applies to you, you also need to follow section 44A of the Tax Administration Act 1994.

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Next up: DS 4: Meaning of film reimbursement scheme

or “What a film reimbursement scheme is and how it works”
Next

Part D Deductions
Film industry expenditure

DS 3Clawback of deductions for film reimbursement schemes

  1. A person who disposes of property under a film reimbursement scheme must use the formula in subsection (3) to reduce—

  2. the total deductions that they have been allowed for the disposal under the scheme under section DS 1 or DS 2; or
    1. the total deductions that they would be allowed for the disposal under the scheme under section DS 1 or DS 2 in the absence of this section.

      1. Deductions must be reduced in the same order as they have been allowed or would be allowed.

      2. The total deductions must be reduced to an amount equal to the greater of zero and the amount calculated using the formula—

        total deductions − total consideration.

        Where:

        • In the formula,—

        • total deductions is the total amount of deductions that—
          1. the person has been allowed under section DS 1 or DS 2; or
            1. the person would be allowed under section DS 1 or DS 2 in the absence of this section:
            2. total consideration is the total amount of consideration for the disposal of the property that the person derives and that is not film income.

              1. Section 44A of the Tax Administration Act 1994 applies to a person to whom this section applies.

              2. Despite the time bar, the Commissioner may amend an assessment at any time in order to give effect to this section.

              3. This section does not apply to a deduction for expenditure excluded under section DZ 11 (Film reimbursement scheme on or before 30 June 2001).

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