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Income Tax Act 2007

Timing and quantifying rules - Depreciation

EE 25: Depreciation loss for plant variety rights application granted in 2005–06 or later income year

You could also call this:

“Tax deduction for plant variety rights application costs”

This law applies to you if you get plant variety rights in 2005-06 or later, and you own the application for these rights. It also applies if you weren’t allowed to claim some costs for the application before.

In the year you get the rights, you can claim some money back for your application costs. To work out how much you can claim, you need to use a special calculation. This calculation takes into account how much you spent on the application, how long you’ve owned it, and how long the rights will last.

The calculation looks like this: cost × months of ownership ÷ depreciation months.

The ‘cost’ is how much you spent on the application. This includes money you might have spent on an earlier application that led to this one. The ‘months of ownership’ is how many whole months you’ve owned the application. The ‘depreciation months’ is the total of how long you’ve owned the application plus how long the plant variety rights will last.

This law helps you get some money back for your application costs, even if you couldn’t claim them before.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514578.

Topics:

Money and consumer rights > Taxes

Business > Industry rules

EE 24: Property ceasing to qualify for pool, or

“When property no longer qualifies for pooling”

EE 26: Setting of economic depreciation rate, or

“How the economic depreciation rate is determined for different types of property”

Part E Timing and quantifying rules
Depreciation

EE 25Depreciation loss for plant variety rights application granted in 2005–06 or later income year

This section applies when—
plant variety rights are granted to a person in their 2005–06 income year or a later income year; and
the rights are granted in relation to a plant variety rights application owned by the person; and
a deduction for expenditure is denied under another provision.

For the income year in which the plant variety rights are granted, the person is allowed a deduction for expenditure on the plant variety rights application of an amount calculated using the formula—
$cost × months of ownership ÷ depreciation months.$

Where:
In the formula,—
cost is the cost to the person of the plant variety rights application, including an amount incurred for the purpose of lodging an earlier application and giving rise under section CG 7B (Disposals or applications after earlier deductions) to a corresponding amount of income relating to the plant variety rights application:
months of ownership is the number of whole calendar months for which the person owns the plant variety rights application:
depreciation months is the total of the number of months of ownership under paragraph (b) and the number of months in the term for which the plant variety rights are granted in relation to the plant variety rights application.

Compare

2004 No 35 s EE 24B

Notes

Section EE 25(3)(a): replaced (with effect on 1 April 2014), on 30 June 2014 (applying for 2014–15 and later income years), by section 66(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
Section EE 25 list of defined terms depreciation: repealed, on 24 February 2016, by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).