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Income Tax Act 2007

Timing and quantifying rules - Income equalisation schemes - Refunds: on application

EH 15: Refund for development or recovery

You could also call this:

“Getting money back from your income equalisation account for business improvements or emergencies”

You can ask for a refund from your main income equalisation account for specific reasons. If you want to use the money for planned development or maintenance of your farming, agricultural, fishing, or forestry business, or to buy livestock for your farming business (except to replace animals lost due to a self-assessed adverse event), you can apply for a refund. The Commissioner will give you the refund if they’re satisfied you’ll use it for these purposes. However, the money must have been in your account for at least 6 months.

You can also ask for a refund to buy livestock to replace animals lost due to a self-assessed adverse event, to avoid serious hardship, or for other reasons the Commissioner decides are valid. For these purposes, you can get a refund no matter how long the money has been in your account.

In all cases, the Commissioner must be satisfied that you’ll use the refund for the purpose you’ve stated. The amount you get back depends on how much you apply for and how much is in your account. Section EH 28 might change these rules in some situations.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514852.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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“Refunds from applications can be counted as income in different tax years”

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EH 16: Income when refund given for development or recovery, or

“Refunds for development or recovery are counted as income”

Part E Timing and quantifying rules
Income equalisation schemes: Refunds: on application

EH 15Refund for development or recovery

  1. Subsection (2) applies when a person wants a refund of some or all of the amount in their main income equalisation account for either or both of the following purposes:

  2. to enable them to undertake, immediately after the refund is given, planned development or maintenance work for their farming or agricultural business, fishing business, or forestry operation:
    1. to enable them to buy, immediately after the refund is given, livestock for use in their farming business, other than livestock replacing livestock disposed of or lost as a result of a self-assessed adverse event.

      1. If the Commissioner is satisfied that the person will use the refund for either or both of the purposes, the Commissioner must refund to them the amount applied for, to the extent to which it can be made up of 1 or more deposits that have been in their main income equalisation account for at least 6 months before the date the deposit ends. Section EH 28 overrides this subsection.

      2. Subsection (4) applies when a person wants a refund of some or all of the amount in their main income equalisation account for 1 or more of the following purposes:

      3. to enable them to buy, immediately after the refund is given, livestock for use in their farming business to replace livestock disposed of or lost as a result of a self-assessed adverse event:
        1. to avoid them suffering serious hardship:
          1. to do anything else that the Commissioner determines, in a case or class of cases, is a purpose for which a refund should be given.

            1. If the Commissioner is satisfied that the person will use the refund for 1 or more of the purposes, the Commissioner must refund to them the amount applied for, regardless of the length of time it has been in the account. Section EH 28 overrides this subsection.

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            Notes
            • Section EH 15 list of defined terms apply: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).