Replacing assets lost in the earthquake will become more feasible for Canterbury businesses, Revenue Minister Peter Dunne said today.
A Supplementary Order Paper to the Taxation (Tax Administration and Remedial Matters) Bill released today by Mr Dunne provides roll-over relief for depreciation recovery.
Mr Dunne said that the release of the Supplementary Order Paper was another step towards providing taxpayers with relief from taxation on windfall gains on depreciation recovered resulting from the earthquakes.
The Supplementary Order Paper also addressed the issue of the timing of deemed sales of destroyed insured assets.
At present an insured asset is deemed to have been sold when it is destroyed. The new amendment allows for the time of sale to be deemed to be the point when the insurance proceeds can be reasonably estimated.
“Timing can have significant implications where the value of the insurance proceeds may not be confirmed for some time,” Mr Dunne said.
“For businesses getting back on their feet, that timing can be crucial and could make all the difference,” he said
“The Government wants to encourage productive investment in Canterbury – these depreciation measures will help achieve that.
“As further tax issues arise in response to the earthquakes, the Government will assess them and respond accordingly.”
The Supplementary Order Paper also contained a number of remedial matters, and is available on Inland Revenue’s policy website at www.taxpolicy.ird.govt.nz