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Income Tax Act 2007

Timing and quantifying rules - Spreading of specific expenditure - Definitions

EJ 26: Allocation of expenditure on aircraft engine overhauls: election by operator of single aircraft

You could also call this:

"How to claim expenses for fixing an aircraft engine if you have one business plane"

Illustration for Income Tax Act 2007

You can choose how to calculate and allocate some expenses for aircraft engine overhauls. This is if you or people related to you operate only one aircraft for business. You must follow certain rules, like allocating deductions to the right income year, as stated in section DW 5 or DW 6. You need to notify the Commissioner of your choice. Your choice applies to each assessment made after you notify the Commissioner. It also applies before your return for the third year in a row that you do not meet the requirements. Your choice stays in place until you notify the Commissioner that you want to revoke it. You must treat each aircraft engine as an unpriced aircraft engine for the purposes of section DW 5. This means you follow specific rules when calculating your expenses.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7281506.

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EJ 25: Allocation of expenditure on aircraft engine overhauls: election by IFRS user, or

"Claiming costs for fixing aircraft engines: a choice for some owners"

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EJ 27: Disposal of aircraft engine or aircraft, or

"Rules for selling an aircraft engine or aircraft you've claimed expenses for"

Part ETiming and quantifying rules
Spreading of specific expenditure: Definitions

EJ 26Allocation of expenditure on aircraft engine overhauls: election by operator of single aircraft

  1. A person may elect to quantify and allocate under this section the amount of a deduction allowed by section DW 5 or DW 6 (which relate to the acquisition, overhaul, and leasing of aircraft engines) in relation to an aircraft and an income year if—

  2. no more than 1 aircraft is operated in business by the person and persons who are associated with the person other than by blood relationship; and
    1. no more than 1 aircraft is operated in a particular business by the person and a person who is associated with the person by blood relationship.

      1. A person who elects to rely on this subsection to the income year must—

      2. allocate a deduction under section DW 5(2) to the income year of the aircraft engine overhaul to which the deduction relates; and
        1. treat each aircraft engine as an unpriced aircraft engine for the purposes of section DW 5.

          1. An election under this section applies for each assessment that is made by the person—

          2. after the person notifies the Commissioner of the election, when or before making a return based on the approach required by subsection (2); and
            1. before the person’s return for the third consecutive income year in which the person does not meet the requirements of subsection (1); and
              1. before the person notifies the Commissioner, when or before making a return based on an approach other than the elected approach, that the election is revoked.

                Notes
                • Section EJ 26: inserted, on (applying for the 2017–18 and later income years), by section 69(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).