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Income Tax Act 2007

Recharacterisation of certain transactions - Tax relief for emergencies - Replacements: depreciable property

FP 8: Replacement property for depreciable property affected by emergency events

You could also call this:

“Help with tax when your property is damaged in an emergency”

If you own depreciable property that is affected by an emergency event, this law applies to you. You must own one or more items of this property, receive compensation for it, and have an amount of affected depreciation recovery income. You also need to plan to acquire replacement property and tell the Commissioner about your decision to suspend recognition of your suspended recovery income, as stated in section 226H of the Tax Administration Act 1994.

You will have an amount of depreciation recovery income under section CG 1 for the affected class, which is equal to the amount of suspended recovery income. This happens at the end of the current year if it is the final income year of the emergency event period, or when you decide not to acquire any more replacement property, or when you go into liquidation or become bankrupt.

This law overrides subpart EE of the depreciation rules, which means it takes priority over those rules.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1432182.

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Part F Recharacterisation of certain transactions
Tax relief for emergencies: Replacements: depreciable property

FP 8Replacement property for depreciable property affected by emergency events

  1. This section applies for a person and a current year when the person—

  2. owns 1 or more items of affected depreciable property that are in the same affected class; and
    1. in or before the current year receives compensation for the items of affected depreciable property; and
      1. has an amount of affected depreciation recovery income; and
        1. has an amount of affected depreciation loss that is less than the amount of affected depreciation recovery income; and
          1. plans in the current year to acquire replacement property; and
            1. notifies the Commissioner of their decision to suspend recognition of their suspended recovery income in accordance with section 226H of the Tax Administration Act 1994.

              1. The person has, in the current year, an amount of depreciation recovery income under section CG 1 (Amount of depreciation recovery income) for an affected class equal to the amount of suspended recovery income for the affected class—

              2. at the end of the current year, if the current year is the final income year of the emergency event period; or
                1. when, in the current year, the person decides not to acquire any more replacement property for the affected class; or
                  1. when, in the current year, the person goes into liquidation or becomes bankrupt.

                    1. This section overrides subpart EE (Depreciation).

                    Notes
                    • Section FP 8: inserted, on , by section 65 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).