Section EJ 4 — Income Tax Act 2007: Expenditure incurred in acquiring film rights in feature films

EJ 4 Expenditure incurred in acquiring film rights in feature films Feature films (1) A deduction for expenditure that a person incurs in acquiring a film right is allocated under this section if the film is a feature film and— (a) the deduction is allowed under section DS 1 (Acquiring film rights): (b) the deduction is allowed under section DS 2 (Film production expenditure) and the film is one for which a large budget film grant is made. Timing of deduction: retention of film right (2) If the person has the film right at the end of an income year, the deduction that is allocated to the income year is the lesser of— (a) the greater of— (i) an apportioned amount of the deduction, calculated for the income year under subsection (3); and (ii) the amount of film income derived in the income year; and (b) the remaining deduction. Calculation of apportioned amount (3) The apportioned amount is calculated for the income year using the formula— completed months × deduction. non-completed months Definition of items in formula (4) In the formula,— (a) completed months is the number of months in the income year, including a part of a month, for which the film is completed: (b) non-completed months is 24, reduced by the number of complete months in the period that— (i) starts on the first day of the month in which the film is completed; and (ii) ends on the last day of the income year before the income year referred to in subsection (2): (c) deduction is the remaining deduction. Timing of deduction: disposal of film right (5) If the person disposes of the film right during an income year, and does not have a film right in the film at the end of the income year, the remaining deduction is allocated to the income year. Meaning of remaining deduction (6) In this section, remaining deduction means, for an income year, the amount of the deduction for expenditure incurred before the end of the income year that has not been allocated to an earlier income year. Defined in this Act: amount , completed , deduction , feature film , film , film income , film right , income year , large budget film grant , remaining deduction Compare: 2004 No 35 s EJ 4 Section EJ 4(1): substituted, on 1 April 2008, by section 360 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EJ 4(1)(b): substituted, on 1 January 2010, by section 123(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EJ 4(1)(b): amended (with effect on 1 January 2010), on 7 September 2010, by section 32(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section EJ 4 list of defined terms government screen production payment : repealed (with effect on 1 January 2010), on 7 September 2010, by section 32(2)(a) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section EJ 4 list of defined terms large budget film grant : inserted (with effect on 1 January 2010), on 7 September 2010, by section 32(2)(b) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).