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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions - Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 70: Insurance for Canterbury earthquake damage of property: treatment as disposal and reacquisition

You could also call this:

“How to handle insurance payouts for Canterbury earthquake-damaged property”

This law is about how you should handle insurance for property damaged by a Canterbury earthquake. It applies to you if you own something that can lose value over time, like a building or machinery.

If your property is damaged by a Canterbury earthquake before the 2024-25 tax year, and you get insurance money for it, this law might affect you. It applies when the insurance company says it’s not worth fixing your property.

When this happens, the law says you should treat it as if you sold your property on the day of the earthquake. The ‘sale price’ is the amount of insurance money you get. Then, the law says you should treat it as if you bought the property again for no cost.

This rule is different from the usual way of dealing with insurance money for damaged property. It replaces another rule called section EE 52.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6820046.

Topics:
Money and consumer rights > Taxes
Housing and property > Home safety and repairs
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“Rules for businesses using IFRS reporting when equity or income recognition changes”

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EZ 71: Insurance for Canterbury earthquake damage of property: limit on depreciation recovery income, or

“Limits on taxable income from insurance payouts for Canterbury earthquake-damaged property”

Part E Timing and quantifying rules
Terminating provisions: Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 70Insurance for Canterbury earthquake damage of property: treatment as disposal and reacquisition

  1. This section applies for a person and an item of depreciable property and an income year before the 2024–25 income year when—

  2. the item is damaged by a Canterbury earthquake as that term is defined in section 4 of the Canterbury Earthquake Recovery Act 2011; and
    1. the person is entitled to an amount of insurance or compensation for the damage to the item; and
      1. the item is assessed by the payer of the insurance or compensation (the insurer) as uneconomic to repair; and
        1. the damage does not meet the requirements of section EE 47(4) (Events for purposes of section EE 44).

          1. The person is treated as, on the date of the Canterbury earthquake,—

          2. disposing of the item for the amount of insurance or compensation; and
            1. reacquiring the item for zero consideration.

              1. This section overrides section EE 52 (Amount of depreciation recovery income when compensation received).

              Notes
              • Section EZ 70: inserted, on (applying for the 2016–17 and later income years), by section 68(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
              • Section EZ 70 heading: amended, on , by section 159(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
              • Section EZ 70(1): amended (with effect on 1 April 2016), on , by section 186 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
              • Section EZ 70(2) heading: amended, on , by section 159(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).