Individual income tax return guide 2011 - Inland Revenue Department
Individual income tax return guide 2011 - Inland Revenue Department
Individual income tax return guide 2011 - Inland Revenue Department
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www.ird.govt.nz<br />
35<br />
There are special provisions for applying the spreading concessions for a<br />
cash-basis person. You qualify as a cash-basis person if:<br />
––<br />
on every day in the <strong>income</strong> year the absolute value of all financial<br />
arrangements added together is $1,000,000 or less, or<br />
––<br />
the absolute value of your <strong>income</strong> and expenditure in the <strong>income</strong><br />
year under all financial arrangements is $100,000 or less, and<br />
––<br />
the deferral of <strong>income</strong> or acceleration of expenditure using the cash<br />
method rather than the accrual method is $40,000 or less.<br />
Please note the “absolute value” is the value of an amount whether it’s<br />
positive or negative.<br />
Sale or maturity of financial arrangements<br />
Whether or not the exemption from the spreading method applies, you<br />
must do a “wash-up” calculation in certain circumstances. For example:<br />
––<br />
a financial arrangement matures, is sold, remitted or transferred<br />
––<br />
there is an absolute assignment of the financial arrangement<br />
––<br />
a party to a financial arrangement is released from making all<br />
remaining payments under the Insolvency Act 1967, the Companies<br />
Act 1993 or the laws of a country or territory other than New<br />
Zealand<br />
––<br />
you cease to be a resident of New Zealand.<br />
––<br />
the calculation ensures that the total gains or losses from the<br />
financial arrangement are brought to account. This applies in every<br />
case—you don’t have to be in the business of buying or selling<br />
financial arrangements, or have bought them for the purpose of<br />
resale, as you would with shares.<br />
When calculating the <strong>income</strong> or expenditure on sale, use our Sale or<br />
disposal of financial arrangements (IR 3K) form.<br />
Income from cash jobs, tips, “under the table” payments,<br />
bartering or an illegal enterprise<br />
If you received any other type of <strong>income</strong> that didn’t have <strong>tax</strong> deducted<br />
from it, print it in Box 23.<br />
Write the details of your <strong>income</strong> and any expenses on a piece of paper<br />
and staple it to the top of page 3 of your <strong>return</strong>.