Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Timing and quantifying rules - Income equalisation schemes - Interest

EH 66: Interest on deposits in thinning operations income equalisation account

You could also call this:

“Interest earned on a special forestry savings account”

You can put money into a special account called a thinning operations income equalisation account. Here’s how the interest on this account works:

If you take your money out within a year of putting it in, you won’t get any interest. For all other deposits, you’ll earn interest.

The bank calculates interest every day from when they confirm they’ve received your deposit until the day you take it out. The interest keeps adding up until 31 March each year or until you take your money out, whichever comes first.

Any interest you earn gets added to your deposit in the account. The interest rate is 3% per year.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515007.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
Previous

EH 65: Thinning operations income equalisation account, or

“Managing your forestry income account for tax purposes”

Next

EH 67: Deduction of deposit, or

“How you can reduce your tax by depositing money into the thinning operations income equalisation scheme”

Part E Timing and quantifying rules
Income equalisation schemes: Interest

EH 66Interest on deposits in thinning operations income equalisation account

  1. No interest is payable on a deposit in a thinning operations income equalisation account that is refunded within 1 year of the date of deposit.

  2. Interest is payable on every other deposit in a thinning operations income equalisation account.

  3. Interest is computed with daily rests from the date of acknowledgment of the receipt of the deposit until the date the deposit is refunded.

  4. Interest on a deposit accrues until the earlier of—

  5. 31 March in each year; and
    1. the date the deposit is refunded.

      1. Accrued interest on a deposit is added to the deposit.

      2. The interest rate is 3% a year.

      Compare