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Income Tax Act 2007

Deductions - Terminating provisions

DZ 22: Aircraft maintenance: aircraft engines acquired before 2017–18 income year

You could also call this:

“Tax deductions for maintaining older aircraft engines”

This law applies to you if you bought an aircraft engine or an aircraft with an engine before the 2017-18 income year. It’s about how you can claim money back for maintaining the engine.

If you have to do regular overhauls on the engine when you use the aircraft, and the value of the engine or aircraft was reduced at the start of the 2017-18 income year under section EZ 23BA, this law affects you. However, it only applies if you didn’t choose to use section EJ 26 for the 2017-18 income year.

If you already did an overhaul on the engine before the 2017-18 income year started, you can claim back the same amount that the value was reduced by in the 2017-18 income year.

If you haven’t done an overhaul yet, you can still claim money back, but it works differently:

For the 2017-18 income year, you can claim the amount the value was reduced by, but less some money. The amount you can’t claim is based on how much of the time between overhauls is left at the end of that year.

For years after 2017-18, you can claim part of the reduced value. The part you can claim is based on how much of the time between overhauls falls in that 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 It might be out of date or be missing some parts.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=DLM7279639.

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DZ 23: Aircraft maintenance: tax accounting provisions for expenditure incurred after 2016–17 income year, or

“Tax rules for aircraft maintenance expenses claimed before 2017”

Part D Deductions
Terminating provisions

DZ 22Aircraft maintenance: aircraft engines acquired before 2017–18 income year

  1. This section applies when—

  2. a person, before the 2017–18 income year, acquires an aircraft engine or an aircraft including an unpriced aircraft engine; and
    1. the person is required to perform aircraft engine overhauls of the aircraft engine when operating the aircraft; and
      1. the adjusted tax value of the aircraft engine or aircraft is reduced at the beginning of the 2017–18 income year by an amount under section EZ 23BA (Aircraft acquired before 2017–18 income year: adjusted tax value, base value, reduced; total deductions increased); and
        1. the person does not make an election under section EJ 26 (Allocation of expenditure on aircraft engine overhauls: election by operator of single aircraft) for the 2017–18 income year.

          1. If the person has performed an aircraft engine overhaul of the aircraft engine before the beginning of the 2017–18 income year, the person has a deduction for the 2017–18 income year of an amount equal to the amount of the reduction referred to in subsection (1)(c).

          2. If the person has not performed an aircraft engine overhaul of the aircraft engine before the beginning of the 2017–18 income year, the person has a deduction,—

          3. for the 2017–18 income year, of an amount equal to the amount of the reduction referred to in subsection (1)(c), reduced by an amount that, as a proportion of the reduction, corresponds to the proportion of the scheduled overhaul period for the aircraft engine that is unexpired at the end of the 2017–18 income year:
            1. for an income year later than the 2017–18 income year, of an amount that, as a proportion of the reduction referred to in subsection (1)(c), corresponds to the proportion of the scheduled overhaul period of the aircraft engine that is included in the income year.

              Notes
              • Section DZ 22: inserted, on (applying for the 2017–18 and later income years), by section 53(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).