Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

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

EZ 74: Insurance for repairs of Canterbury earthquake damage: optional timing rule for income, deductions

You could also call this:

“Optional timing for Canterbury earthquake insurance income and repair deductions”

This section is about how you deal with insurance money and repair costs for things you own that were damaged in the Canterbury earthquakes. It applies to you if your property was damaged, but not so badly that you had to get rid of it completely. You also need to be getting insurance money for the damage.

If you choose to use this rule, it affects when you count the insurance money as income and when you can claim the repair costs. If you know how much insurance money you’ll get before the end of the 2023-2024 tax year, you count it as income in that year. But if you know both the insurance amount and the repair cost earlier, you count it in that earlier year.

For the repair costs, it’s similar. You can claim them in the 2023-2024 tax year if you know what they are by then. But if you know both the repair cost and the insurance amount earlier, you claim them in that earlier year.

This rule is different from the usual rules about insurance payments. It lets you choose when to count the insurance money as income and when to claim the repair costs, as long as it’s not later than the 2023-2024 tax year.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6820054.

Topics:
Money and consumer rights > Taxes
Previous

EZ 73: Insurance for Canterbury earthquake damage causing disposal: optional timing rule for income, deductions, or

“Optional timing for reporting income and deductions from Canterbury earthquake-damaged property disposal”

Next

EZ 75: Consideration for property or services: IFRS foreign ASAPs before 2014–15 income year, or

“How to handle certain foreign financial arrangements before 2014-2015 tax year”

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

EZ 74Insurance for repairs of Canterbury earthquake damage: optional timing rule for income, deductions

  1. This section applies for a person and an item of depreciable property 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 damage—
      1. does not result in the item being subject to a disposal and reacquisition under section EZ 70; and
        1. does not meet the requirements of section EE 47(4) (Events for purposes of section EE 44); and
        2. the person is entitled to an amount of insurance or compensation for the damage to the item; and
          1. the person chooses to apply this section for all items of depreciable property meeting the requirements of paragraphs (a) to (c).

            1. If the amount of insurance or compensation for the damage (the insurance receipt) is derived or able to be reasonably estimated before the end of the 2023–24 income year, the person's income from the insurance receipt is attributed to the earlier of—

            2. the 2023–24 income year:
              1. the first income year in which—
                1. the amount of expenditure for total repair of the damage (the repair cost) is or has been incurred or able to be reasonably estimated; and
                  1. the insurance receipt is or has been derived or able to be reasonably estimated.

                  2. If the repair cost is incurred or able to be reasonably estimated before the end of the 2023–24 income year, the person's deductions for the repair cost are attributed to the earlier of—

                  3. the 2023–24 income year:
                    1. the first income year in which—
                      1. the repair cost is or has been incurred or able to be reasonably estimated; and
                        1. the insurance receipt is or has been derived or able to be reasonably estimated.

                        2. This section overrides sections CG 4, EE 22, and EE 52 (which provide for receipts of insurance or indemnity payments) in relation to the timing of the person's—

                        3. income from the insurance receipt:
                          1. deductions for the repair cost.

                            Notes
                            • Section EZ 74: 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 74(2): amended (with effect on 1 April 2016), on , by section 190 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                            • Section EZ 74(2)(a): amended (with effect on 1 April 2016), on , by section 190 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                            • Section EZ 74(3): amended (with effect on 1 April 2016), on , by section 190 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                            • Section EZ 74(3)(a): amended (with effect on 1 April 2016), on , by section 190 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).