Section DO 3 — Income Tax Act 2007: Trees on farms

DO 3 Trees on farms When this section applies (1) This section applies when— (a) a person carries on, on land in New Zealand, a farming or agricultural business that is the principal business carried on on the land; and (b) they plant or maintain trees on the land; and (c) the trees are not— (i) trees for which the person is allowed a deduction under section DO 2 ; or (ii) trees planted mainly to produce fruit; or (iii) trees planted under a forestry encouragement agreement under the Forestry Encouragement Act 1962 . Deduction (2) The person is allowed the following deductions: (a) in an income year in which the person incurs expenditure on planting trees on the land, they are allowed a deduction of the lesser of $7,500 and the expenditure that they incur; and (b) in an income year in which the person incurs expenditure on maintaining trees on the land, they are allowed a deduction of the lesser of $7,500 and the expenditure that they incur. Link with subpart DA (3) This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. Defined in this Act: business , capital limitation , deduction , general limitation , general permission , income year , New Zealand , Compare: 2004 No 35 s DO 3