Date posted: 20/03/2023
Cyclones and floods - tax relief measures
Tax changes to support affected regions by Cyclone Hale, the January floods and Cyclone Gabrielle.
In brief
- CA ANZ have been advocating Inland Revenue for changes to support members affected by the recent natural disasters.
- Guidance for those immediately affected and for longer term recovery.
- A summary of action from Inland Revenue to support affected regions.
The CA ANZ NZ Tax Team have been kept busy advocating to Inland Revenue (IR) on tax changes to support our members and taxpayers following the devastating effects of Cyclone Hale, the January floods and Cyclone Gabrielle.
We have been engaging on issues both of immediate concern to those affected and of significance for recovery and rebuild. The matters raised have been wide ranging, covering operational, policy and legislative aspects.
The table below summarises some of the key issues identified and IR’s response to date:
| Issue | Raised by CA ANZ | Accepted / Rejected | Comment / more information |
| 2022 tax return filing and extension of time | Y | A | Follow up of outstanding 2022 tax returns delayed until after 31 May 2023; however the due date for filing and calculation of filing percentages remains on 31 March 2023. |
| Time bar for 2022 tax returns filed | Y | A | Provided certain criteria are satisfied 2022 tax returns filed after 31 March 2023 but on or before 31 May 2023 will not be open to review by Inland Revenue after 31 March 2027. |
| Tax payments, instalment arrangements, remission of penalties and use of money interest | Y | A |
Cyclone Hale, the January floods and Cyclone Gabrielle have been declared emergency events. Developments available here. Information on tax relief for emergency events is available on IR’s website. |
| Donated trading stock | Y | A | Exemption from income tax for trading stock donated to donee organisations, public authorities and non-associated persons (in the latter provided there is a business purpose) extended to 31 March 2024. Remedial legislative amendment proposed. |
| Other donations and philanthropic grants | IR is considering the various issues. | ||
| Damage to buildings | Y | IR is considering the various issues, including depreciation roll over, write-off, tax treatment of insurance proceeds, low value asset write-off. | |
| Damage to other property and land | Y | IR is considering the various issues, including damage to orchards and farmland. | |
| Tax losses – offset elections and loss carry-back | Y | IR is considering. | |
| Government funds and grants and payments from banks, government agencies, mayoral relief funds, donation funds, and the like | Y | IR is considering the various tax and GST issues in relation to these payments. | |
| GST treatment of grants/support payments received by a registered person in response to Cyclone Hale, the January flood and Cyclone Gabrielle | Y | R | No exemption from GST will be granted on these support package grants received by a registered person. |
| Accommodation and other payments made by employers to affected/displaced employees | Y | Legislative amendments proposed to exempt from tax and FBT certain payments and accommodation and other benefits provided within the first 8 weeks of the weather event to employees (maximum amount of exemption up to $5,000, excluding accommodation). | |
| Accommodation and other payments made to employees to work on rebuild and recovery projects | Y | Five year exemption proposed for accommodation provided to an employee who goes to a weather effected area to work on rebuilding or recovery projects. | |
| Working for Families exclusion of receipt of flood and Cyclone Gabrielle support payments | A | Determination issued declaring January flood and Cyclone Gabrielle emergency events for the purposes of family scheme income – receipt of support payments will not affect working for families entitlements. |
|
| Research and development tax credits supplementary returns |
A | Extension to file R&D tax credit returns granted for taxpayers who are significantly adversely affected by either or both of the January floods and Cyclone Gabrielle. |
|
| Deadlines for various applications, elections and write-offs | Y | IR is considering the issues e.g. bad debt write-off, distribution of beneficiary income, LTC elections, election to form imputation group, timber income spread-back, change GST filing period. |
|
| Income equalisation deposits and withdrawals |
Y | A | Late deposits allowed for the 2022 year and early withdrawals from the income equalisation scheme. |
| Relaxation of record keeping requirements | Y | IR is considering the issues. |
|
| Eligibility for cost of living payment |
A | The final date to be considered for eligibility for the cost of living payment has been extended to 31 May 2023 (not applicable for individuals who are automatically assessed). |
