The income equalisation (IE) scheme allows taxpayers to deposit income from farming, fishing or forestry with us. The money is paid into a special account and earns interest at 3% per annum on amounts left on deposit for more than 12 months. The interest paid becomes part of the deposit for tax purposes. The deposit is held for a maximum period of five years.
Deposits are tax deductible in the year for which they are made, and withdrawals (including interest) are assessable in the year for which they are made.
After 31 March each year we send a statement to all taxpayers who have IE deposits, showing their current balance and any interest credited to the account.
The deadline for IE scheme deposits for the 2007-08 tax year has been extended to 30 April 2009 for those farmers affected by the anticipated reduced dairy payout in the 2008-09 tax year.
To allow IE scheme deposits under the extended timeline, we will reopen those assessments for the 2007-2008 tax year.
Tax agents can request that a particular payment that was made to your client's income tax account be transferred to the IE account. You will need to write to us and:
- identify the payment in question
- state that it was incorrectly credited to the income tax account, and
- ask that it is deposited into the IE scheme.
The address is:
Income Equalisation Reserve Scheme
PO Box 39010
If the request is made on or before 30 April 2009, you can request that the deposit applies to the 2008 year if the client meets the income equalisation criteria.
Date published: 02 Apr 2009
Back to top