Section DP 11 — Income Tax Act 2007: Cost of timber

DP 11 Cost of timber When this section applies (1) This section applies when a person— (a) derives an amount on the disposal of timber and the amount is income of the person under section CB 24 (Disposal of timber or right to take timber) or CB 25 (Disposal of land with standing timber); and (b) has incurred expenditure in relation to the timber that is a cost of timber. Deduction (2) The person is allowed a deduction for the amount that is a cost of timber. Timing of deduction (3) The deduction is allocated— (a) for timber harvested from the land before the time of disposal, to the income year in which the timber first becomes trading stock of the person; or (b) otherwise, by section EA 2 (Other revenue account property). Meaning of timber (4) In this section, timber includes— (a) the creation or grant of a right to take timber: (b) the grant of a licence or an easement in relation to timber: (c) the creation of a forestry right as defined in section 2 of the Forestry Rights Registration Act 1983, other than a right in favour of the proprietor in relation to establishing, maintaining, and harvesting timber. (4B) Subsection (2) does not apply if the amount of income of the person under section CB 24 would be exempt income under section CW 1B (Treaty of Waitangi claim settlements: rights to take timber) but for section CW 1B(3). Link with subpart DA (5) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply. Defined in this Act: amount , capital limitation , cost of timber , deduction , dispose , exempt income , general permission , income , income year , timber , trading stock Section DP 11: substituted (with effect on 1 April 2008), on 7 December 2009, by section 15(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section DP 11(4B): inserted (with effect on 1 April 2008), on 29 August 2011, by section 18(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section DP 11 list of defined terms exempt income : inserted (with effect on 1 April 2008), on 29 August 2011, by section 18(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section DP 11 list of defined terms income : inserted (with effect on 1 April 2008), on 29 August 2011, by section 18(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).