Specific income
The following items are listed in Part C ITA 2007
1) Amounts derived from business (CB1):
Business definition:
a) The activity should not be a hobby.
b) The intention of the taxpayer is making profit.
E.g., A person has a hobby of gardening. He built the garden for his friend and in return recieved some monetary compensation. This is not a business income. However, if a gardening company built a garden for others and get paid. That is a business income.
2) Amount received on disposal of business assets (CB2):
a. That includes trading stocks.
b. The disposal is made outside the ordinary course of business.
3) Amounts derived from profit-making undertaking or scheme (CB3)
4) Amounts a person derived from disposing of personal property is income if they acquired the income for the purpose of disposing of it (CB4)
For example, A person purchases farmland with the expectation to sell it at a higher price after two years. The amount received after two years is an income for that person.
5) Amounts a person derived from disposing of personal property is income if their business is to deal in property of that kind (CB5).
Example: The money received by a motor vehicle trader from selling his cars is an income for him.
6) Under some situations, disposal of land is an income:
a. If a person has the purpose of disposal, (no matter whatother purposes he has) when he acquired the land (CB6).
b. If a person or related person is carrying on land-related business or has the intention to carry on land-related business (CB7). But it is overridden by the exclusion of residential land (CB16) and for business premises (CB19).
c. If the land is for landfill-usage (CB8).
7) Under some situation, disposal of land is not an income:
a. If the land is disposed after ten years of acquisition (CB6-CB12).
b. If the land is for residential use (CB16).
c. If the land is the premises of a business or is intended to be used as a premise for business (CB19).
d. If the land is for farming use or agricultural use (CB21).
8) Amount derived from sale of patent (CB30).
9) Property obtained by theft (CB32).
10) Income of the owner of the land (CC1):
Example: rent, a fine, a premium, a payment for the goodwill of a business, a payment for the benefit of a statutory licence and other revenues.
11) Amount derived from non-compliance with covenant of repair (CC2).
Example: A enant pays the fine for broken facilities.
12) Amount derived from a financial agreement or a trust (CC3).
For example, the money received from an investment fund.
13) Payment of interest (CC4).
14) Annuities (CC5)
Annuity received is a payment received in regular intervals. However, annuity received from the crown bank account and from life insurance policies are exempt income.
15) Non-cash benefit received from debtor (CC7).
For example: I lend money to a hotel, and in return, I have free accommodation. The free accommodation is an income for me.
16) Interest received from commissioner (CC8).
For example, IRD pays interest to tax payers for the unclaimed refund.
17) Dividend (CD4)
Refer to article Dividend.
18) Unclassified fringe benefits (CD20).
Refer to article Fringe benefit.
19) Maori authority distributions (CD37).
Refer to article Maori authorities income.
20) Amount derived from employment (CE1):
Examples:
a. Salary or wages or an allowance, bonus, extra pay, or gratuity
b. Expenditure on account of an employee that is expenditure on account of the person
c. A benefit received under a share purchase agreement
d. Directors’ fees
e. Compensation for loss of employment or service
f. Any other benefit in money
g. Benefit for accommodation, no matter it is money or not
21) Restrictive covenants (CE9).
A restrictive covenant is a type of contractual arrangement. It restricts a person to perform a particular service as an employee, office holder or independent contractor. It is often provided for a resigned employee with money compensation. The money received is an income for that resigned employee.
22) Benefits, pensions, compensation and government grants (CF1):
a. an accident compensation payment
b. an education grant
c. an income-tested benefit
d. a living alone payment
e. a New Zealand superannuation payment
f. a parental leave payment
g. a pension
h. a veteran’s pension
23) Depreciation recovery income (CG1).
For example: A person sold his vehicle for $9000. The vehicle has a book value of $7000 and depreciation of $3000. The recovered $2000 depreciation is treated as an income
24) Bad debt repayment (CG3).
If a bad debt is repaid by the debtor, it is considered income.
25) Recovered expenditure or loss (CG4).
For example, payment from an insurance company to cover loss is an income, provided that the loss had already been written off by the taxpayer.
26) Receipts from insurance, indemnity, or compensation for interruption or impairment of business activities (CG 5B).
For example, where a manufacturing company's factory has suffered from fire and the Insurance company has compensated for the loss, the compensation is an income for the manufacturing company.
27) Receipts from insurance, indemnity, or compensation for trading stock (CG6).
For example: A trading company's warehouse was suffered from fire, the trading stocks were burnt. Insurance company compensated for the loss. The compensation is an income for the trading company.
28) Adjustment for closing values of trading stock, livestock, and excepted financial arrangements (CH1).
A trading company calculated its trading stock and found out there was a $5000 increse in stock. This $5000 is an income for the trading company.
29) Adjustment for deferred payment of employment income (CH3).
For example,unexpired prepayment is considered as an income at the end of the financial year. Can refer to the article Accrual expenditure deduction & Consumable aids.