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Income Tax Act 2007

Schedule 20: Expenditure on farming, horticultural, aquacultural, and forestry improvements

You could also call this:

“Improvements to farms and forests that you can claim on your tax”

The Income Tax Act 2007 has a schedule that lists improvements you can make to your farm, horticultural, aquacultural, or forestry land. You can claim a percentage of the cost of these improvements as a deduction. You can find the list of improvements in the schedule, which is divided into parts for different types of farming, such as farming, freshwater fish farming, and forestry. For example, if you prepare your land for farming, you can claim 5% of the cost as a deduction, or if you plant non-listed horticultural plants, you can claim 10% of the cost as a deduction, as stated in section 44C of the Tax Administration Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523373.

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20Expenditure on farming, horticultural, aquacultural, and forestry improvements Empowered by ss DO 4, DO 5, DO 11, DO 12, DO 13, DP 3, DZ 17, DZ 18, YA 1

This is a medium table on 3 pages having 2 columns with the first column divided in two. The first row on each page is the headings for the 2 columns. The heading for the second column has several lines of text. Some of the entries in column 2 have more than 1 line of text and a few have paragraphs and subparagraphs. The table is divided into Parts A to G.
Improvement Percentage of diminished value of improvement allowed as deduction
Part A
Farming
1

unless clause 2 applies, preparation of the land for farming or agriculture, including cultivation and grassing

5
2

regrassing and fertilising all types of pasture in the course of a significant capital activity that relates to a type of pasture with an estimated useful life of more than 1 year

45
3

draining of swamp or low-lying lands

5
4

construction of access roads or tracks to or on the land

5
5

construction of dams, stopbanks, irrigation or stream diversion channels, or other improvements for the purpose of conserving or conveying water for use on the land or for preventing or combating soil erosion, other than planting or maintaining trees, whether or not on the land, for the purpose of providing shelter to the land

5
6

construction of earthworks, ponds, settling tanks, or other similar improvements mainly for the purpose of the treatment of waste products in order to prevent or combat pollution of the environment

5
7

sinking of bores or wells for the purpose of supplying water for use on the land

5
8

construction of aeroplane landing strips to facilitate aerial topdressing of the land

5
9

planting of non-listed horticultural plants on the land (see section 44C of the Tax Administration Act 1994)

10
10

erection on the land of electric power lines or telephone lines

10
11

construction on the land of feeding platforms, feeding yards, plunge sheep dips, or self-feeding ensilage pits

10
12

construction on the land of supporting frames for growing crops

10
13

construction on the land of structures for shelter purposes

10

Part B
Freshwater fish farming
1

drilling of water bores

5
2

draining of land or the excavating of sites for ponds, races, or tanks

5
3

construction of ponds, races, settling ponds, sluices, or tanks of impervious materials to conduct or contain waters

5
4

supply and installation of pipes for water reticulation

5
5

construction of access paths, embankments, service paths, walkways, or walls

5
6

construction of effluent ponds

5
7

supply and installation of baffles or screens for the containing or excluding of fish

10
8

construction of fencing on the fish farm

10

Part C
Mussel farming
1

acquisition, preparation, and mooring of pontoons or rafts or other floating structures for collecting spat

20
2

acquisition, mooring, and outfitting of moored floating platforms or longlines from which the collected spat is suspended for subsequent growth

20
3

collecting and depositing of shell or other suitable material on the sea bed to create spatting surfaces

20

Part D
Rock oyster farming
1

acquisition and preparation of spatting sticks

20
2

construction and erection of posts, rails, or other structures for the holding of spatting sticks during spat catching and maturing

20
3

construction of fences (including breakwater fences)

20

Part E
Scallop farming
1

acquisition, preparation, and mooring of floating structures for collecting spat

20
2

acquisition, mooring, and outfitting of longlines from which the collected spat is suspended for subsequent growth

20

Part F
Sea-cage salmon farming
1

acquisition, preparation, and mooring of pontoons or rafts or other floating structures for securing or protecting cages or other containment vessels

20
2

acquisition, preparation, and placing of equipment or structures, including cages, nets, tanks, or other vessels, for the containment of live salmon

20
3

acquisition and placing of buoys and ropes used in the breeding or maturing of salmon

20

Part G
Forestry
1

felling, clearing, destruction, or removal of timber, stumps, scrub, or undergrowth on the land in the preparation of the land for the planting of trees on the land

5
2

eradication or extermination, to enable the planting of trees on the land, of animal or vegetable pests on the land

5
3

destruction, to enable the planting of trees on the land, of weeds or plants detrimental to the land

5
4

draining of swamp or low-lying lands in the preparation of the land for the planting of trees on the land

5
5

construction of roads to or on the land (including any culverts or bridges necessary for the construction), when the roads are formed and wholly or mainly metalled or sealed

5
6

construction of roads to or on the land (including any culverts or bridges necessary for the construction), when the roads—

  • are not access tracks to which section DP 1(1)(h) applies; and
    1. are 1 of the following:
      1. roads that are formed and partially metalled or sealed; or
        1. roads that are not metalled or sealed

          		2.  20
          7

          construction of dams, stopbanks, irrigation or stream diversion channels, or other improvements for the purpose of conserving or conveying water for use on the land or for preventing or combating soil erosion

          		5
          8

          repair of flood or erosion damage

          		5
          9

          sinking of bores or wells for the purpose of supplying water for use on the land

          		5
          10

          construction of aeroplane landing strips to facilitate aerial topdressing or disease control work or firefighting on the land

          		5
          11

          construction on the land of fences, including the purchase of wire or wire netting for the purpose of making new or existing fences rabbit-proof

          		10
          12

          erection on the land of electric power lines or telephone lines

          		10
          Notes
          • Schedule 20: amended (with effect on 1 April 2013 and applying for an improvement made on or after the first day of the 2013–14 income year), on , by section 148(1)(a) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
          • Schedule 20: amended (with effect on 1 April 2013 and applying for an improvement made on or after the first day of the 2013–14 income year), on , by section 148(1)(b) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
          • Schedule 20: amended (with effect on 1 April 2013 and applying for an improvement made on or after the first day of the 2013–14 income year), on , by section 148(1)(c) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
          • Schedule 20: amended (with effect on 1 April 2013), on , by section 104(1)(a) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52); and applying (as amended, with effect on 17 July 2013, on 24 February 2016) for an improvement made on or after the first day of the 2013–14 income year.
          • Schedule 20: amended (with effect on 1 April 2013), on , by section 104(1)(b) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52); and applying (as amended, with effect on 17 July 2013, on 24 February 2016) for an improvement made on or after the first day of the 2013–14 income year.
          • Schedule 20: amended (with effect on 1 April 2013), on , by section 104(1)(c) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52); and applying (as amended, with effect on 17 July 2013, on 24 February 2016) for an improvement made on or after the first day of the 2013–14 income year.
          • Schedule 20 part G clause 6(a): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
          • Schedule 20: amended (with effect on 1 April 2008), on , by section 582(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Schedule 20: amended (with effect on 1 April 2008), on , by section 582(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).