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Income Tax Act 2007

Deductions - Terminating provisions

DZ 13: Enhancements to land unamortised at end of 2004–05 year

You could also call this:

“Continuing deductions for pre-2005 farm improvements not fully claimed”

If you were allowed to deduct money for improvements you made to your farmland before 2005, but you haven’t finished deducting all of it yet, this law is for you. It says you can keep deducting the leftover amount in the years when those improvements are still helping your farm business.

This law adds to the general permission for deductions and overrules the rule about capital expenses. However, you still need to follow other general rules about deductions.

Remember, this only applies if you were already allowed to deduct this money under an older tax law for work you did on your farm in New Zealand. The old law was called section DO 4(1) of the Income Tax Act 1994, and it covered specific types of farm expenses.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514243.

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“Rules for mineral mining that applied from 1954 to 2005 (now removed)”

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DZ 14: Deductions under specified leases, or

“Rules for claiming deductions on special property leases”

Part D Deductions
Terminating provisions

DZ 13Enhancements to land unamortised at end of 2004–05 year

  1. This section applies when—

  2. a person is allowed a deduction under section DO 4(1) of the Income Tax Act 1994, of an amount set out in section DO 4(3)(a) or (c) of that Act, for expenditure incurred in carrying on a farming or agricultural business on land in New Zealand; and
    1. at the end of the 2004–05 income year, part of the expenditure (the unamortised balance) remains to be allowed as a deduction in later income years.

      1. The person is allowed a deduction for the unamortised balance of expenditure in the income year in which the expenditure is of benefit to the business.

      2. This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

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