Assistance to drought-affected North Canterbury and Central and East Coast North Island farmers

We are aware of the drought causing financial issues for many farmers within the North Canterbury and Central and East Coast North Island regions, and understand it is likely to affect income for both 2009 and later years.

Income equalisation scheme - deposits

We have the ability under legislation to accept later deposits to the income equalisation scheme than usual.

For the drought affected farmers the Commissioner has decided to relax the rules by allowing late deposits for the 2009 income year up to 30 April 2010, regardless of when the return is filed or what the due date is for filing the tax return.

The relaxation in the rules will apply if:

• the person is a farmer who has been adversely affected by the current drought
• evidence of how the farmer has been adversely affected is submitted with the deposit, ie a statement to the effect that the farmer has been adversely affected with the farmer's or tax agent' signature as the minimum criteria for this
• the deposit is received by 30 April 2010
• the notice with the deposit indicates that:
  • the deposit is for the main income equalisation deposit scheme
  • it is to apply for the 2009 tax year, and
  • the criteria in this notice are to apply.

Income equalisation scheme - withdrawals

Normally income equalisation deposits are not available for refund until 12 months after the deposit is made. However we do have discretion to allow early refunds, particularly in the case of "adverse events" or when the person is suffering serious hardship.

We also have the ability to determine a "class of case" that qualify for an early refund.

We will allow those farmers who qualify as above to make early withdrawals. This will also apply to amounts that have been deposited previously but that have been in the scheme for less than a year.

All applications for an early refund must be in writing and will take approximately 20 days to be processed. It should be remembered that the refund will be income in the year that the application is made unless it is elected to treat the refund as income in the prior income year (where the application for refund is made in the specified period).

For more information on income equalisation and deposits please refer to our  Standard Practice Statement 05/09 Income equalisation deposits and refunds.

For more information please contact us on our emergency helpline 0800 473 566.

Date published: 22 May 2009

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