NZ Taxation Advisory Blog

Guide IR264 (Rental Income – Tax rules for those who rent out residential property and holiday homes) explains that any rent paid in advance is taxable in the year it is received. Principles from Legislation and Interpretations Interpretation Statement: IS 16/06 The general rule, as stated in ITA Section BD 3(2), is that income is allocated to the year in which it is derived. Income Credited to an Account According to ITA Section BD 3(4), if income is credited to an account and has not been accounted for earlier, it is considered "derived" when credited. This means: Income credited to a bank account that hasn’t been recognized in earlier years must be allocated to the year it was credited. Subpart BD of the ITA 2007 This section deals with Income, Deductions, and Timing, providing a framework for determining when income is derived and how it should be accounted for. Links Guide IR264 – Rental Income Tax Rules Interpretation Statement IS 16/06 ITA 2007, Section BD 3 Subpart BD...

The Income Tax Act (ITA) 2007 includes various schedules to define tax rates and rules for different contexts. Here's an overview of some key schedules: Schedule 1: Basic Tax Rates (Personal, Company, Trustees, RWT, etc.) Schedule 2: Basic Tax Rates for PAYE Income Payments (Tax Codes) Schedule 3: Provisional Tax and Terminal Tax Schedule 4: Standard Rates of Tax for Schedular Payments Schedule 13: Depreciable Land Improvements What Are Depreciable Land Improvements? Schedule 13 of the ITA 2007 lists various depreciable land improvements. These include: Chimneys Fences Hardstanding: Ground surfaced with a hard material for parking vehicles. Retaining Walls Roads (Driveways) Links Schedule 1 - Basic Tax Rates (ITA 2007) Schedule 2 - PAYE Income Payments (ITA 2007) Schedule 3 - Provisional and Terminal Tax (ITA 2007) Schedule 4 - Schedular Payments (ITA 2007) Schedule 13 - Depreciable Land Improvements (ITA 2007) What is a Road? (NZTA) Driving Basics - What is a Road? (Drive.govt.nz)

T he Income Tax Act (ITA) outlines the rules and permissions related to depreciation in Part D and Part E. Here's a breakdown of key sections: Section DA1: General Permission Section DA1 of Part D permits deductions for amounts of expenditure or loss, including depreciation loss, when deriving income. Part E: Timing and Quantifying Rules Subpart EA: Rules for specific items like: Trading stock Livestock Excepted financial arrangements (EA1) Revenue account property (EA2) Prepayments (EA3) Subsections of Interest Depreciation Loss : When a person has a depreciation loss for an item (Section EE1(2)). Depreciation Recovery Income : When a person recovers depreciation income for an item (Section EE1(3)). Depreciable Property : Defined under Section EE6 as property expected to decline in value while being used or available for income generation. Exclusions from Depreciable Property : Section EE7 lists items not considered depreciable property, such as land and trading stock. Links Secti...