Section EJ 11 — Income Tax Act 2007: Amount paid by lessee for non-compliance with covenant for repair

EJ 11 Amount paid by lessee for non-compliance with covenant for repair When this section applies (1) This section applies when a lessee of land is allowed a deduction under section DB 21 (Amounts paid for non-compliance with covenant for repair). Timing of deduction (2) The lessee may choose to allocate some or all of the amount of the deduction to any 1 or more of the 3 income years before the income year in which the amount is paid or recovered. The lessee may make an allocation only to an income year in which they used the land for deriving income. Effect of allocation (3) If the lessee makes an allocation,— (a) they are denied a deduction for the allocated amount in the income year in which the amount of the deduction is paid or recovered; and (b) they are allowed a deduction for the allocated amount in the income year to which it is allocated. Notice (4) The following provisions apply to an allocation for the purposes of subsection (2): (a) the lessee makes the election by giving a notice to the Commissioner that specifies how the amount of the deduction has been allocated; and (b) the lessee must give the notice within the time required to file a return of income for the tax year in which the amount was paid or recovered or within a longer time if the Commissioner agrees; and (c) the lessee must not revoke the allocation. Defined in this Act: amount , Commissioner , deduction , income , income year , lessee , notice , return of income , tax year , Compare: 2004 No 35 s EJ 10