Section EJ 2 — Income Tax Act 2007: Spreading forward of deductions for repairs to fishing boats

EJ 2 Spreading forward of deductions for repairs to fishing boats When this section applies: generally (1) This section applies when a person who carries on a fishing business in New Zealand is allowed a deduction for expenditure incurred in making repairs or alterations required by Part 21 of the Maritime Rules made under the Maritime Transport Act 1994 to the equipment, hull, or machinery of a fishing boat used wholly for the purposes of the business. When subsection (3) applies (2) Subsection (3) applies when the person does not cease to carry on the business before the end of the fourth tax year following the tax year in which the expenditure is incurred. Business not ceasing within 4 years (3) The person may do 1 of the following to the total amount of expenditure allowed as a deduction: (a) deduct it in the income year in which the expenditure is incurred; or (b) allocate it to any 1 of the 4 income years following the income year in which the expenditure is incurred, and deduct it in that income year; or (c) allocate parts of it over some or all of the 4 income years following the income year in which the expenditure is incurred, and deduct each part allocated in the income year to which it is allocated; or (d) deduct it, or any part of it that has not already been deducted, in the fourth income year following the income year in which the expenditure is incurred. When subsection (5) applies (4) Subsection (5) applies when the person ceases to carry on the business before the end of the fourth tax year following the tax year in which the expenditure is incurred. Business ceasing within 4 years (5) The person may do 1 of the following to the total amount of expenditure allowed as a deduction: (a) deduct it, or any part of it that has not already been deducted, in the income year in which the person ceases to carry on the business; or (b) allocate it, or any part of it that has not already been deducted, equally to the income year in which it is incurred and the following income years in which the person continues to carry on the business. Some definitions (6) In this section,— fishing boat — (a) means a boat registered as a fishing vessel under section 103 of the Fisheries Act 1996; and (b) includes a small boat belonging to any boat that is so registered fishing business means a business of catching or taking fish, including crustaceans and shellfish, for the purposes of sale. Defined in this Act: amount , business , deduction , fishing boat , fishing business , income year , New Zealand , tax year , Compare: 2004 No 35 s EJ 2 Section EJ 2(1): amended (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years), by section 39(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section EJ 2(6) fishing boat paragraph (a): amended (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years), by section 39(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).