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EE 46: Items for purposes of section EE 44
or “List of property types eligible for depreciation claims when sold or disposed of”
You could also call this:

“Changes affecting tax claims for property wear and tear”

This section talks about different events that can happen to property you own. These events are important for working out how much you can claim for wear and tear on your property. Here’s what you need to know:

If you change how or where you use your property, and you can’t claim for wear and tear anymore, it counts as an event. This happens on the first day of the next tax year. It also includes changes to commercial fit-outs or building status.

If your property is stolen or lost and you don’t get it back in the same tax year, that’s an event too.

Another event is when your property gets badly damaged. For buildings, this means it can’t be used to make money anymore and has to be knocked down.

If someone takes back property from you because you didn’t pay for it, that’s also an event. This happens on the day they take it back.

For geothermal wells, an event happens when you start using it to make money after a testing period.

If someone takes your property using legal powers, that’s an event.

When you stop owning a fixture or improvement you were renting or using, that’s an event.

For things like patents or copyrights, if you can no longer use your rights and never will be able to again, that’s an event.

There’s a special event for aircraft parts when they’re replaced during an engine overhaul.

These events are important because they affect how much you can claim for wear and tear on your property.

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Next up: EE 48: Effect of disposal or event

or “What happens when you sell or dispose of a business asset”
Next

Part E Timing and quantifying rules
Depreciation

EE 47Events for purposes of section EE 44

  1. For the purposes of section EE 44, this section describes the events to which sections EE 48 to EE 51 apply.

  2. The first event is the change of use, or change of location of use, of an item of property, as a result of which a person is denied a deduction for an amount of depreciation loss for the item for the next income year. The event is treated as occurring on the first day of the next income year, and includes a change in use of an item for the purposes of the definition of commercial fit-out and a change in the status of a building related to an item for the purposes of that definition.

  3. Despite subsection (2), if the event is connected to a person’s income becoming exempt income, the event is treated as occurring immediately before the person’s income becomes exempt.

  4. The second event is the loss or theft of an item of property, if the item is not recovered in the income year in which the loss or theft occurs.

  5. The third event is—

  6. the irreparable damage of an item of property that is not a building; or
    1. the damage of an item of property that is a building, or of the neighbourhood of the building, causing the building to be—
      1. useless for the purpose of deriving income; and
        1. demolished or abandoned for later demolition.

        2. The fourth event is the seller’s repossession of an item of property to which section EE 3 applies because the buyer wholly or partly fails to pay the consideration. The event is treated as occurring on the date on which the item is repossessed.

        3. The fifth event is, for a person’s geothermal well that is unavailable for use under section EE 6(4) because the geothermal energy proving period has ended, is when the person starts to—

        4. use the well in deriving assessable income or carrying on a business for the purpose of deriving assessable income:
          1. have the well available for use in deriving assessable income or carrying on a business for the purpose of deriving assessable income.

            1. The sixth event is the acquisition of an item of property by a person acting under statutory authority.

            2. The seventh event is the cessation of ownership of a fixture or improvement—

            3. that a lessee is treated as having under section EE 4(2); or
              1. that a person is treated as having under section EE 5(3).

                1. The eighth event is an occurrence that has the effect that the owner of an item of intangible property is no longer able, and will never be able, to exercise the rights that constitute or are part of the item.

                2. The ninth event is described in section EZ 21(2) (Sections EE 45 and EE 47: permanent removal: allowance before 1 April 1995).

                3. The tenth event is the fitting of an item of property to an aircraft or aircraft engine as a replacement piece as part of an aircraft engine overhaul to which section DW 5 (Aircraft operators: aircraft engines and aircraft engine overhauls) applies.

                Compare
                Notes
                • Section EE 47(1) heading: amended, on , by section 63(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 47(1): amended, on , by section 63(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 47(2): amended, on (applying for the 2011–12 and later income years), by section 53(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                • Section EE 47(2B) heading: replaced, on (with effect on 28 June 2018), by section 105 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                • Section EE 47(2B): inserted (with effect on 28 June 2018), on , by section 165 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                • Section EE 47(4) heading: substituted (with effect on 4 September 2010), on , by section 26 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                • Section EE 47(4) heading: amended (with effect on 1 April 2020), on , by section 81(1) (and see section 81(4) for application) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section EE 47(4): substituted (with effect on 4 September 2010), on , by section 26 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                • Section EE 47(4)(a): amended (with effect on 1 April 2020), on , by section 81(2) (and see section 81(4) for application) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section EE 47(4)(b): amended (with effect on 1 April 2020), on , by section 81(3) (and see section 81(4) for application) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section EE 47(11) heading: inserted, on , by section 63(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 47(11): inserted, on , by section 63(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 47 list of defined terms aircraft engine: inserted, on , by section 63(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 47 list of defined terms aircraft engine overhaul: inserted, on , by section 63(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).