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EH 78: Meaning of thinning operations maximum deposit
or “Explains the maximum amount you can deposit from thinning operations income”
You could also call this:

“Defines key terms used in the thinning operations income equalisation scheme”

In the thinning operations income equalisation scheme, there are some important terms you need to know:

The ‘date the deposit ends’ means different things depending on the situation. It could be when the refund is calculated, when the Commissioner gets your application for a refund, or when the Commissioner is told about a liquidation.

A ‘deposit’ is a thinning operations deposit. This includes any interest added to it under certain rules.

The ‘specified period’ for your tax year is either 6 months after your accounting year ends, or the time from when your accounting year ends until 1 month after you have to file your tax return, whichever is shorter.

‘Thinning operations’ are when you cut down some trees in a young forest to help the other trees grow better. You’re not trying to clear the whole forest.

A ‘thinning operations deposit’ is money you pay to the Commissioner under certain rules.

Your ‘thinning operations income equalisation account’ is an account the Commissioner keeps for you to track your deposits and refunds.

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Next up: EI 1: Spreading backward of income from timber

or “Dividing timber sale income across multiple tax years”
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Part E Timing and quantifying rules
Income equalisation schemes: Definitions

EH 79Other definitions

  1. In the thinning operations income equalisation scheme,—

    date the deposit ends means—

    1. the date on which the refund is calculated, when section EH 68 applies:
      1. the date on which the Commissioner receives the application for the refund, when section EH 71 or EH 73 applies:
        1. the date on which the Commissioner receives notice of the liquidation, when section EH 75 applies

          deposit—

          1. means a thinning operations deposit; and
            1. includes, for the purposes of sections EH 66(2) to (4) and EH 70 to EH 77, interest that is added to a thinning operations deposit under section EH 66(5)

              specified period, for a person’s tax year, means the shorter of—

              1. the period of 6 months after the end of the accounting year that corresponds to the tax year; and
                1. the period from the end of the accounting year that corresponds to the tax year to the date 1 month after the date by which the person must, under section 37 of the Tax Administration Act 1994, file their return of income for the accounting year that corresponds to the tax year

                  thinning operations means operations in which some trees in an immature stand of trees are felled for the purpose of improving the growth and form of the remaining trees and not for the purpose of permanently breaking the canopy

                    thinning operations deposit means a payment made to the Commissioner under section EH 64(1)

                      thinning operations income equalisation account, for a person, means the account that the Commissioner keeps in the person’s name under section EH 65.

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                      Notes
                      • Section EH 79 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).