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Income Tax Act 2007

Income - Exempt income

CW 1B: Treaty of Waitangi claim settlements: rights to take timber

You could also call this:

“Tax-free timber rights in Treaty settlements”

When you have a right to take timber, and it’s taken away as part of a Treaty of Waitangi claim settlement, you might get new rights to take timber instead. If this happens, and the new rights are basically the same as the old ones (except for small differences because of the settlement), you don’t have to pay income tax on the value of these rights.

The money you would normally have to pay tax on when you give up your right to take timber, or when you get new rights, is exempt from tax in this case. This is explained in section CB 24(1)(b).

However, if you get paid extra money as compensation for the new rights replacing the old ones, you might have to pay tax on that extra money.

If you’re the person getting the new rights to take timber, there’s another part of the law (section DP 9B) that talks about how much these new rights cost you for tax purposes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3995200.

Topics:
Money and consumer rights > Taxes
Māori affairs > Treaty of Waitangi
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CW 1: Forestry companies established by the Crown, Maori owners, and holding companies acquiring land with standing timber from founders, or

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CW 2: Forestry encouragement agreements, or

“Tax exemptions for forestry agreements”

Part C Income
Exempt income

CW 1BTreaty of Waitangi claim settlements: rights to take timber

  1. This section applies when a person's right to take timber (the old right) is extinguished, and new rights (the new rights) to take timber are granted to the person in place of the old right, if—

  2. the sole reason for the new rights replacing the old right is to facilitate a Treaty of Waitangi claim settlement process; and
    1. the rights and obligations of the new rights are equivalent to the old right, ignoring differences that are solely for the reason in paragraph (a).

      1. An amount under section CB 24(1)(b) (Disposal of timber or right to take timber) for the extinguishing of the old right, or for the granting of the new rights, is exempt income of the relevant person. The amount is not income under that section.

      2. Subsection (2) does not apply to an amount to the extent it is compensation paid, for the new rights replacing the old right, to the person who is granted the new rights.

      3. Section DP 9B (Treaty of Waitangi claim settlements: rights to take timber) deals with the cost of the new rights for the person who is granted them.

      Notes
      • Section CW 1B: inserted (with effect on 1 April 2008), on , by section 7 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).