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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions

EZ 7: Acquiring patent rights before 1 April 1993

You could also call this:

“Rules for tax deductions on patent rights bought before April 1993”

If you bought patent rights before 1 April 1993, this part of the law tells you how to handle the money you spent on them. You can get some of that money back as a deduction on your taxes.

The amount you can deduct is the same as what you paid for the patent rights. If your patent rights end or you sell them before they expire, you can still get some money back. The amount you get back depends on how long you had the rights compared to how long they were supposed to last.

You spread out the deduction over the years that the patent rights were supposed to be valid. But if your rights end early or you sell them, you can claim that deduction in the same year it happens.

This only applies if section DZ 8 of the law says it does. Remember, you can’t claim any deductions that you’ve already claimed before.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516008.

Topics:
Money and consumer rights > Taxes
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Part E Timing and quantifying rules
Terminating provisions

EZ 7Acquiring patent rights before 1 April 1993

  1. This section applies when section DZ 8 (Acquiring patent rights before 1 April 1993) applies.

  2. The amount of the deduction is the expenditure that the person has incurred in acquiring the patent rights.

  3. If, before the expiry of the patent rights, the rights have come to an end or have been disposed of, the person is allowed a deduction of an amount that bears to the total sum of the expenditure on the acquisition of the rights the same proportion as the unexpired term of the rights when they came to an end or were disposed of bears to their unexpired term at the date of their acquisition. An amount that the person has otherwise been allowed as a deduction is not included.

  4. The deduction referred to in subsection (2) is allocated to the income years in relation to which the term of the patent rights that is unexpired at the date of acquisition applies.

  5. The deduction referred to in subsection (3) is allocated to the income year in which the rights have come to an end or been disposed of.

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Notes
  • Section EZ 7 heading: amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EZ 7(1): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EZ 7(2): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EZ 7(3): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EZ 7(4): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).