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Income Tax Act 2007

Timing and quantifying rules - Income equalisation schemes - Definitions

EH 35: Meaning of main maximum deposit

You could also call this:

“Explaining the maximum amount you can deposit into your main income equalisation account”

The main maximum deposit is the most money you can put into your main income equalisation account for a year of business. This amount is different for farmers, fishers, and foresters.

For farmers, the maximum deposit is either set by the government or based on how much money they would make in a year if they only did farming. The government can make rules about how much farmers can deposit, including setting no limit at all.

Fishers can deposit an amount equal to what they would earn in a year if they only did fishing.

Foresters can deposit an amount equal to what they would earn in a year if they only did forestry work.

When figuring out these amounts, you don’t consider rules that might move income or expenses to different years, except for a special rule about cattle destroyed because of a disease called Mycoplasma bovis.

The government can change how much farmers can deposit by making new rules. These rules are considered secondary legislation, which means they have to follow certain steps to become official.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514898.

Topics:
Money and consumer rights > Taxes
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EH 36: Other definitions, or

“Explanation of important terms used in the main income equalisation scheme”

Part E Timing and quantifying rules
Income equalisation schemes: Definitions

EH 35Meaning of main maximum deposit

  1. Main maximum deposit means the maximum deposit that this section says a person may make to their main income equalisation account for an accounting year.

  2. In subsections (3) to (5), amount means an amount calculated without applying—

  3. any provision, other than section EZ 4B (Cattle destroyed because of Mycoplasma bovis: spreading), allocating income derived or expenditure incurred to an income year other than the corresponding income year in which the income was in fact derived or the expenditure was in fact incurred; or
    1. any provision of any of the income equalisation schemes referred to in section EH 1(2).

      1. The maximum deposit that a farmer may make is—

      2. the amount determined by an Order in Council made under subsection (6); or
        1. if no order is in force, an amount equal to the net income that the farmer would have in the tax year corresponding to the accounting year if—
          1. the farmer derived income only from the farming or agricultural business in the accounting year; and

            2. The maximum deposit that a fisher may make is an amount equal to the net income that the fisher would have in the tax year corresponding to the accounting year if the fisher derived income only from the fishing business in the accounting year.

            3. The maximum deposit that a forester may make is an amount equal to the net income that the forester would have in the tax year corresponding to the accounting year if the forester derived only income from forestry in the accounting year.

            4. The Governor-General may make an Order in Council declaring that the maximum deposit a farmer may make for an accounting year or for every accounting year is—

            5. an amount calculated in the manner specified in the order; or
              1. an unlimited amount.

                1. An Order in Council under subsection (6) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

                Compare
                Notes
                • Section EH 35(2)(a): amended (with effect on 1 April 2017), on , by section 39(1) (and see section 39(2) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section EH 35(3)(b)(ii): repealed, on , by section 168(1) (and see section 168(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                • Section EH 35(7) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                • Section EH 35(7): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).