Revenue Minister Stuart Nash has announced his intention to introduce a legislative amendment to ensure that payments received by a land owner from the grant of a land right (such as a licence or a limited term easement) continue to be taxable.
“Payments for the grant of a land right were always intended to be taxable income under current legislation. However doubts have been raised on the clarity of the legislation on this point.
“To be clear – the policy intent has always been that such payments should be taxable since they are a substitute for rent.
“We want to eliminate any doubt. So I have asked officials to begin work on a remedial amendment to be included in the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill, which is currently being considered by the select committee,” Mr Nash says.
Mr Nash says that the proposed amendment is intended to apply retrospectively from 1 April 2013 with a savings provision protecting positions taken before today’s announcement.
“The savings provision will apply to taxpayers who have already filed a tax return or received a binding ruling from Inland Revenue on the basis that the payments were not taxable before today,” says Mr Nash.