The Issues Log

Jane Wakefield - PricewaterhouseCoopers

Section / Provision Income Tax Act 2007

Section / Provision Income Tax Act 2004

Date Received

1994 Act – EG 11 provides that the number of months relevant to the calculation of the depreciation loss in relation to a pool of assets is limited to the number of months in the taxpayer’s Income year. 

2004 Act - EE 21 Provides for the same formula but under subsection (7)(b) the number of months taken into account is limited to those in which the taxpayer owns “the item”, uses the item, or has the item available for use for any purpose. 

The number of months to which the formula relates is completely altered in 2004 Act focusing in that instance on an item, presumably one of the pooled assets.

The effect of EE 21(7)(b) of the 2004 Act, while unclear, is clearly different from EG 11 of the 1994 Act.

No intended legislative change was included in Schedule 22A of the ITA 2004.

The panel has concluded that this is An unintended legislative change arises in respect of section EE 21(7) and (8) of the Income Tax Act 2004 – and carried over to the Income Tax Act 2007. 

Both the Income Tax Act 2004 and the Income Tax Act 2007 be amended retrospectively.