Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
EZ 2: Deductions for disposal of property: 1982–83 and 1989–90 income years
or “Rules for deductions when selling long-held property”
You could also call this:

“Deductions for oil and gas development costs from late 1990 to late 1991”

If you’re a petroleum miner, you can deduct certain expenses related to petroleum development that happened between 1 October 1990 and 15 December 1991. These expenses are allowed under section DZ 3. You need to spread out these deductions equally over 10 years. The 10-year period starts from either when you begin commercial production or when you incurred the expense, whichever comes later.

This rule also applies if you’re doing petroleum mining outside of New Zealand through a branch or a controlled foreign company. The operations must be very similar to the petroleum mining activities covered by this law.

If you’re in a partnership that does petroleum mining, you’re considered to have a share in the petroleum permit or other property of the partnership. Your share is based on how much of the partnership’s income you’re entitled to.

When this law talks about selling an asset, it also includes selling part of an asset. So, if you sell only a portion of your petroleum mining asset, the same rules apply.

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 It might be out of date or be missing some parts.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

Next up: EZ 4: Valuation of livestock bailed or leased as at 2 September 1992

or “How to value livestock leased out before September 1992”
Next

Part E Timing and quantifying rules
Terminating provisions

EZ 3Petroleum development expenditure from 1 October 1990 to 15 December 1991

  1. Expenditure that is allowed as a deduction under section DZ 3 (Petroleum mining: development expenditure from 1 October 1990 to 15 December 1991) must be deducted in equal amounts over the 10 years starting with the later of—

  2. the income year in which commercial production starts; and
    1. the income year in which the expenditure is incurred.

      1. This section applies with any necessary modifications to a petroleum miner who undertakes petroleum mining operations that are—

      2. outside New Zealand and undertaken through a branch or a controlled foreign company; and
        1. substantially the same as the petroleum mining activities governed by this Act.

          1. For the purposes of this section, a partner is treated as having a share or interest in a petroleum permit or other property of a partnership to the extent of their income interest in the partnership.

          2. For the purposes of this section, references to the disposal of an asset apply equally to the disposal of part of an asset.

          Compare