Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Terminating provisions

CZ 36: Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years

You could also call this:

“Rule for tax-free backdated social rehabilitation payments from 2008 to 2018”

You should know about a rule that applies to payments for social rehabilitation from 2008 to 2018. This rule is about when you get money for personal service rehabilitation, which is help to get better after an injury or illness.

Here’s how it works:

If you paid someone to help you with your social rehabilitation in one year, but you didn’t get the money to pay for it until a later year, there’s a special rule. As long as you’ve followed all the tax rules, the money you get is treated as exempt income. This means you don’t have to pay tax on it in the year you receive it.

For example, if someone helped you in 2010, but you didn’t get the money to pay them until 2012, you don’t have to pay tax on that money in 2012. This only works if you’ve done everything right with your taxes, and if the tax office (called the Commissioner) agrees.

This rule is here to help people who got payments for their rehabilitation a bit late, so they don’t have to worry about extra taxes.

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 It might be out of date or be missing some parts.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=LMS223390.

Topics:
Money and consumer rights > Taxes
Previous

CZ 35: Amounts derived by Te Kōwhatu Tū Moana, or

“Tax-free income for Te Kōwhatu Tū Moana trust during specific period”

Next

CZ 37: Income equalisation schemes, or

“Rules for tax treatment of refunds from income smoothing schemes for farmers and businesses”

Part C Income
Terminating provisions

CZ 36Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years

  1. This section applies for income years from the 2008–09 income year to the 2017–18 income year when—

  2. a person is paid an amount as a personal service rehabilitation payment; and
    1. the person pays an amount to another person for providing them with a key aspect of social rehabilitation, referred to in the definition of personal service rehabilitation payment, in an income year; and
      1. the payment referred to in paragraph (a) that is paid in relation to the service referred to in paragraph (b) is made in an income year that is later than the income year in which the service is provided to the person.

        1. If the Commissioner is satisfied that the tax obligations relating to the personal service rehabilitation payment have been met, the payment is treated as exempt income for the income year in which the person derives the payment.

        Notes
        • Section CZ 36: inserted (with effect on 1 July 2008), on , by section 54 of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).