Section DT 1A — Income Tax Act 2007: Ring-fenced allocations

DT 1A Ring-fenced allocations When this section applies (1) This section applies to an amount of a person's deductions for expenditure and loss for an income year to the extent to which it is— (a) petroleum exploration expenditure: (b) petroleum development expenditure: (c) residual expenditure. Basis for allocation of deductions (2) If, but for this subsection, an amount that relates to petroleum mining operations undertaken outside New Zealand would be allocated to an income year (the current year ), including an amount carried forward and allocated to the current year, the amount that is allocated to the current year is no more than the amount of the person's income derived for the current year from all petroleum mining operations undertaken outside New Zealand. Excess allocations: carried forward and re-instated next year (3) Any excess not allocated to the current year because of subsection (2) is carried forward and treated as— (a) relating to petroleum mining operations undertaken outside New Zealand for the next income year; and (b) allocated to that next income year. Restriction on reinstating excess allocations (4) Despite subsection (3), the excess is not allocated to the next income year, and no deduction is allowed or allocated to any income year for the excess, if sections IA 5 and IP 3 (which relate to the carrying forward of tax losses for companies) would not have allowed the excess to be carried forward to that next income year in a loss balance, treating the excess as a tax loss component arising on the last day of the current year. Defined in this Act: deduction , income year , loss balance , New Zealand , petroleum development expenditure , petroleum exploration expenditure , petroleum mining operation , residual expenditure , tax loss component Section DT 1A: inserted (with effect on 1 April 2008), on 6 October 2009, by section 97(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).