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EZ 7: Acquiring patent rights before 1 April 1993
or “Rules for tax deductions on patent rights bought before April 1993”
You could also call this:

“Tax deductions for premiums on land leased before April 1993”

When you paid a premium on land you leased before 1 April 1993, you can get a tax deduction. This applies when section DZ 9 of the Income Tax Act 2007 is relevant to your situation.

The amount you can deduct is the premium you paid when you first got the lease or when you renewed it. If you don’t use the land for the whole tax year, the amount you can deduct will be less.

If you give the lease to someone else, you can’t deduct more than the premium you originally paid to get the lease.

You spread the deduction evenly over all the years that the lease lasts.

For leases that don’t have a set end date, the ‘term of the lease’ means the shortest time the lease has to run.

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Next up: EZ 9: Pool method for items accounted for by globo method for 1992–93 income year

or “Rules for grouping similar property items into a single pool for accounting purposes from 1992-93”
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Part E Timing and quantifying rules
Terminating provisions

EZ 8Premium paid on land leased before 1 April 1993

  1. This section applies when section DZ 9 (Premium paid on land leased before 1 April 1993) applies.

  2. The amount of the deduction is the premium paid on the grant or renewal of the lease. If person A does not use the land for the whole of a tax year, the amount of the deduction is reduced proportionately.

  3. If the lease or the renewal of the lease is granted to another person, the deduction must not be more than the amount of the premium paid by person A on the acquisition of the lease.

  4. The deduction is allocated evenly to the income years in relation to which the term of the lease applies.

  5. In this section, term of the lease, for a lease of indefinite duration, means the minimum period it has to run.

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