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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 82: Transfers of deposits when adverse event income equalisation accounts abolished

You could also call this:

“Moving savings to new accounts when government closes special farm savings scheme”

This law talks about what happens to your money in a special savings account when the government stops that type of account. If you have money in an ‘adverse event income equalisation account’ when the government ends these accounts, here’s what will happen:

If you don’t already have a ‘main income equalisation account’, the government will open one for you. All the money from your old account will be moved to this new account. This happens automatically at the start of the year after the old accounts are closed.

When your money is moved to the new account, it’s treated differently from other deposits. You can’t claim it as a tax deduction, and some rules that usually apply to deposits in these accounts don’t apply to this transferred money.

This law makes sure you don’t lose your savings when the government changes the type of accounts available. Your money is safely moved to a new account for you to use in the future.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS179935.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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EZ 81: Refund of excess deposit in adverse event income equalisation account as consequence of election under section EZ 4B, or

“Refund of extra money in your special farming account after choosing to spread out cattle income”

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EZ 83: Insurance for damage of property caused by North Island flooding events: treatment as disposal and reacquisition, or

“How to handle taxes when you receive insurance for flood-damaged property”

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

EZ 82Transfers of deposits when adverse event income equalisation accounts abolished

  1. This section applies when a person has an adverse event income equalisation account (the adverse event account) at the end of the income year (the repeal year) in which the repeal of section EH 39 (Adverse event income equalisation account) comes into force.

  2. If the person does not have a main income equalisation account (the main account) at the end of the repeal year, the Commissioner must open such an account in the name of the person at the beginning of the following year.

  3. An amount equal to the balance in the person’s adverse event account is debited to the person’s adverse event account at the end of the repeal year and credited to the person’s main account at the beginning of the following year.

  4. A credit to the person’s main account under subsection (3) is a deposit that is not subject to section EH 4 (Main deposit) and the person is not allowed a deduction under section DQ 1 (Main income equalisation scheme) for the deposit.

Notes
  • Section EZ 82: inserted, as section EZ 80, on , by section 191 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
  • Section EZ 82: renumbered (with effect on 18 March 2019), on , by section 59 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).