Section CG 2 — Income Tax Act 2007: Remitted amounts

CG 2 Remitted amounts When this section applies (1) This section applies when— (a) a person is allowed a deduction in an income year of an amount that the person is liable to pay; and (b) the person’s liability for the amount is later remitted or cancelled, wholly or partly; and (c) the remission or cancellation is not a dividend; and (d) the person is not required to calculate a base price adjustment by section EW 29 (When calculation of base price adjustment required). Income (2) The amount to which the remission or cancellation applies is income of the person. Timing of income (3) The income is allocated to the income year in which the remission or cancellation occurs. How remission or cancellation occurs (4) Remission or cancellation occurs, for the purposes of this section, in 1 of the following ways: (a) a liability is remitted to the extent to which the person is discharged from it without fully adequate consideration in money or money’s worth: (b) a liability is cancelled to the extent to which the person is released from it under the Insolvency Act 2006 or the Companies Act 1993 or the laws of a country or territory other than New Zealand: (c) a liability is cancelled to the extent to which the person is released from it by a deed or agreement of composition with the person’s creditors: (d) a liability is cancelled to the extent to which it is irrecoverable or unenforceable through lapse of time. Defined in this Act: amount , deduction , dividend , income , income year , New Zealand , pay Compare: 2004 No 35 s CG 2