Section EE 45 — Income Tax Act 2007: Consideration for purposes of section EE 44

EE 45 Consideration for purposes of section EE 44 General rule (1) For the purposes of section EE 44 , the consideration equals the amount that a person derives excluding any GST charged if the person is a registered person, as modified by subsections (3) to (11) minus the amount (the disposal cost ) that they incur in deriving that amount, to the extent to which the disposal cost–– (a) is not allowed as a deduction to the person other than as a deduction for an amount of depreciation loss; and (b) is not counted in “ the amount that a person derives ” . GST for disposal costs (1B) All amounts deducted or deductible by the person under section 20(3) of the Goods and Services Tax Act 1985 in relation to the disposal cost described in subsection (1) are subtracted from the disposal costs under that subsection. Consideration may be zero or negative (2) For the purposes of section EE 44 , the consideration may be zero or a negative amount. Other than market value (3) If the person has consideration that is not the item's market value, the amount that the person derives is the item’s market value. Three qualifications are— (a) if the person makes a taxable supply, “ market value ” means the market value minus any GST that would be charged on the supply: (b) this subsection does not apply to a transfer under a relationship agreement; and (c) this subsection does not apply in a case described in any of subsections (5) to (10). Relationship with subpart FC (4) Subsection (3) does not apply to a disposal of property to which any of sections FC 3 and FC 4 (which relate to the distribution or transmission of property) applies. Change of use or location of use (5) The consideration that a person derives from the event described in section EE 47(2) is the item’s market value. Two qualifications are— (a) if the person makes a taxable supply, “ market value ” means the market value minus any GST that would be charged on the supply: (b) this subsection does not apply to a transfer under a relationship agreement. Loss or theft (6) The amount that a person derives from the event described in section EE 47(3) is the amount of insurance, indemnity, or compensation they receive for the loss or theft ( amount A ). If the person is a registered person, amount A does not include the amount, if any, of GST charged on amount A to the extent to which amount A is treated as being consideration received for a supply of services by the registered person under section 5(13) of the Goods and Services Tax Act 1985. Unused geothermal well brought into use (7) The amount that a person derives from the event described in section EE 47(6) is the amount of the deduction for depreciation loss allowed under section EE 39(4) . Irreparable damage or damage rendering building useless (8) The amount that a person derives from the event described in section EE 47(4) is the total of the amount of insurance, indemnity, or compensation, and the amount of proceeds from the disposal, they receive for the affected item ( amount A ). If the person is a registered person, amount A does not include the amount, if any, of GST charged on amount A to the extent to which amount A is treated as being consideration received for a supply of services by the registered person under section 5(13) of the Goods and Services Tax Act 1985. Repossession (9) The amount that a person derives from the event described in section EE 47(5) is the item’s cost minus the net amount paid. Two qualifications are— (a) if the person is a registered person, the “ amount that a person derives ” does not include any GST charged on a taxable supply they make: (b) “ net amount paid ” means the amount paid by the buyer to the seller for the item under the contract minus any amount refunded by the seller to the buyer. Other items (10) The amount that a person derives from the disposal of an item along with any other item, or from the occurrence of an event involving an item that also involves other items, is the item’s market value. Two qualifications are— (a) if the person makes a taxable supply, “ market value ” means the market value minus any GST that would be charged on the supply: (b) this subsection does not apply to a transfer under a relationship agreement. Item leaving New Zealand permanently (11) The amount that a person derives from the event referred to in section EE 47(10) is described in section EZ 21(1) ( Sections EE 45 and EE 47 : permanent removal: allowance before 1 April 1995). Defined in this Act: amount , consideration , deduction , depreciation loss , dispose , geothermal well , GST , GST charged , New Zealand , registered person , relationship agreement , services , taxable supply , Compare: 2004 No 35 s EE 38 Section EE 45(1) heading: substituted (with effect on 1 April 2008), on 21 December 2010, by section 52(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(1): substituted (with effect on 1 April 2008), on 21 December 2010, by section 52(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(1B) heading: inserted (with effect on 1 April 2008), on 21 December 2010, by section 52(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(1B): inserted (with effect on 1 April 2008), on 21 December 2010, by section 52(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(2) heading: substituted (with effect on 1 April 2008), on 21 December 2010, by section 52(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(2): substituted (with effect on 1 April 2008), on 21 December 2010, by section 52(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(3): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(6): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(7): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(8) heading: substituted (with effect on 4 September 2010), on 29 August 2011, by section 25(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section EE 45(8): amended (with effect on 4 September 2010), on 2 November 2012, by section 36(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section EE 45(8): amended (with effect on 4 September 2010), on 29 August 2011, by section 25(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section EE 45(8): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(9): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(6)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(9)(a): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(6)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(10): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(7) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section EE 45(11): amended (with effect on 1 April 2008), on 21 December 2010, by section 52(8) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).