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Business income tax
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What is the adverse event income equalisation scheme?

The adverse event income equalisation scheme allows farmers who experience adverse events to carry income from forced livestock sales over to the next income year.

A self-assessed adverse event is an event which materially affects the business of the taxpayer.

These are:

  • fire, flood, drought or other natural event or
  • sickness or disease among livestock

Making an adverse event income equalisation scheme deposit

A deposit is made by completing an Adverse event income equalisation deposit (IR139) form giving full details of the adverse event.  The maximum deposit allowed is the net of income from selling livestock and the cost of the livestock involved.

The deposit must be received no later than one month after the balance date; no extensions of time are granted.  This allows a deposit to be deducted from income in the year of the adverse event and reduces taxable income.

Deposits earn interest at a rate of 6.5% per annum from the date of receipt until the deposit is refunded.  A deposit can only remain in the adverse event income equalisation scheme for a period of 12 months. If the deposit is not refunded within the 12 month period the amount deposited and the accrued interest will be transferred to the main income equalisation scheme.

Requesting an adverse event income equalisation scheme refund

A refund can be made at any time for all or part of the deposit.  To request a refund simply complete the Income equalisation deposit/refund form (IR155) or send a letter stating  the reason the refund is required.