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Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 51B: Adjustments for leases that become finance leases

You could also call this:

“How to handle tax changes when a regular lease becomes a finance lease”

If you have a lease that becomes a finance lease, and the adjustment made under [section FA 11] is negative, this is what happens:

You (as the lessor or lessee) can claim a deduction for the amount of the adjustment. This deduction applies in the income year when the lease changes to a finance lease.

Remember, this deduction follows the general permission rule, but the general limitations still apply to it.

This rule helps balance out any changes when a regular lease turns into a finance lease.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1621318.

Topics:
Money and consumer rights > Taxes
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Part D Deductions
Specific rules for expenditure types

DB 51BAdjustments for leases that become finance leases

  1. This section applies when an adjustment made under section FA 11 (Adjustments for leases that become finance leases) is negative.

  2. The amount of the adjustment is a deduction of the lessor or the lessee, as applicable, in the income year in which the lease becomes a finance lease.

  3. This section supplements the general permission. The general limitations still apply.

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Notes
  • Section DB 51B: inserted, on , by section 341 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).