The Issues Log

Section / Provision Income Tax Act 2004

EI 6 Leases: Income derived in anticipation

Date Received

The timeframe for giving notice to the CIR to spread income (e.g. payment of goodwill) is unclear in the 2004 Act.  The 1994 Act provides for the person to make the request " during the next succeeding year " where as the 2004 Act states "the person must give notice in the tax year ".  The issue is which tax year?

EB 2 Allocation of gross income received in anticipation

•  The Panel considers that there is an unintended legislative change in respect of section EI 6 of the 2004 Act.

•  The Panel recommended that section EI 6 be amended retrospectively to confirm that a request to the Commissioner to allocate income received in anticipation between income years is to be made in the next year succeeding the tax year in which the income was derived.

•  The Panel recommended a referral be made to Inland Revenue to consider whether the time limit for making a request to allocate income under section EI 6 ITA 2004 should be broadened to include the year of derivation of the income.