Date posted: 20/06/2023
Updated tax relief measures on 2023 cyclones and floods
An updated summary on enacted and proposed tax changes relating to the extreme weather events of 2023.
In brief
- Tax relief measures for those affected by cyclones and floods.
- Information for members and clients.
If you are uncertain about tax relief measures following the cyclones and floods earlier this year, or wondering whether a measure applies to you/your clients, here is an updated summary on tax changes put in place or proposed to date.
| Issue | Raised by CA ANZ | Accepted / Rejected | Comment / more information |
| 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. 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. |
| Other donations and philanthropic grants. |
IR is considering the various issues. |
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| Damage to buildings. |
Y | A | Legislation introduced to provide temporary roll over relief for depreciable property destroyed or irreparably damaged by the weather events. More detail available here. |
| Damage to other property and land. |
Y | IR is considering the various issues, including damage to orchards and farmland. |
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| Tax losses – offset elections and loss carry-back. |
Y | IR is considering. |
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| 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. |
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| Accommodation and other payments made by employers to affected/displaced employees. |
Y | A | Legislation enacted 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). More information here. |
| Accommodation and other payments made to employees to work on rebuild and recovery projects. |
Y | A | Five year exemption for accommodation provided to an employee who goes to a weather affected area to work on rebuilding or recovery projects provided employee begins work on the project by 1 April 2024. Proposal to extend this start date period to 5 years. |
| 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. |
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| 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. |
| 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 | A | IR approach published here. |
| Deductibility of ongoing expenses. |
Y | A | Proposed amendment in the bill to confirm that ongoing expenses can continue to be deducted when there is no income-earning activity due to the weather event. |
| Optional thin capitalisation concession. |
Y | A | Proposed temporary rule in the bill to suspend the effect of the accounting treatment of damaged assets and insurance proceeds when applying the thin capitalisation rules. |
| Depreciation on depreciable property when access temporarily restricted. |
Y | A | Legislative amendment proposed to clarify that a depreciation deduction may be claimed on depreciable property when access to the property is temporarily restricted because of a weather event. |
