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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 84: Insurance for damage of property caused by North Island flooding events: limit on depreciation recovery income

You could also call this:

“Limits on taxable income from insurance for flood-damaged depreciable property”

This section applies to you if you have an item of property that can be depreciated and it was damaged in a North Island flooding event. If you’re entitled to insurance or compensation for the damage, but the damage doesn’t meet certain requirements, and another specific section doesn’t apply, this section tells you how to calculate your depreciation recovery income.

If you would normally have to report depreciation recovery income for the damaged item, this section limits how much you need to report. You only need to report the smaller of two amounts: either the normal amount of depreciation recovery income you would report, or the total amount of depreciation deductions you’ve claimed for the item in the past.

This rule overrides the usual way of calculating depreciation recovery income when you receive compensation for damaged property.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS952993.

Topics:
Money and consumer rights > Taxes
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EZ 85: Item treated as available for use if access restricted due to North Island flooding events, or

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

EZ 84Insurance for damage of property caused by North Island flooding events: limit on depreciation recovery income

  1. This section applies for a person and an item of depreciable property when—

  2. the item is damaged by a North Island flooding event; and
    1. the person is entitled to an amount of insurance or compensation for the damage to the item; and
      1. the damage does not meet the requirements of section EE 47(4) (Events for purposes of section EE 44); and
        1. section EZ 83 does not apply for the item.

          1. If the person would derive depreciation recovery income under section EE 52 (Amount of depreciation recovery income when compensation received) in an income year for the item in the absence of this section, the person derives in the income year an amount of depreciation recovery income equal to the lesser of—

          2. the amount of depreciation recovery income under section EE 52 that the person would derive in the income year for the item in the absence of this section:
            1. the total of the amounts of depreciation loss for which the person has been allowed deductions for the item.

              1. This section overrides section EE 52.

              Notes
              • Section EZ 84: inserted (with effect on 1 April 2022), on , by section 73(1) (and see section 73(2) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).