Emissions Trading Scheme issues

Read about emissions units allocated to owners of fishing quota, anti-avoidance rules, consequences of transfer of emissions units between forestry rights holders and the Permanent Forest Sink Initiative, transfers to interim entities as part of Treaty settlement arrangements, and zero-rating of certain transfers under Negotiated Greenhouse Agreements.

Emissions units allocated to owners of fishing quota

The amendment in section CX 51C provides that when a person who owns fishing quota is allocated an emissions unit to compensate them for the fall in value of that fishing quota and then disposes of that unit, no taxable income arises. The provision does not apply if the person holds the fishing quota on revenue account.

Anti-avoidance rules

New section GC 3B states that section GC 1 applies to a disposal of emissions units as if the emissions unit were trading stock. New GC 3B also preserves the exception formerly included in GC 1, which is that the rule does not apply to the surrender of an emissions unit.

Consequences of transfer of emissions units between forestry rights holders

Forestry rights agreements are entered into between a landowner and another party, who will normally take responsibility for planting, maintaining and harvesting the forest.

Permanent Forest Sink Initiative

The Permanent Forest Sink Initiative (PFSI) is a government scheme under which foresters who enter into a covenant limiting their rights to fell their timber can receive emissions units from the government.

Transfers to interim entities as part of Treaty settlement arrangements

Legislation is amended to ensure that the Māori entity or person who receives a pre-1990 forest land emissions unit from the person appointed under section 73 of the CCRA also holds that unit on capital account.

Zero-rating of certain transfers under Negotiated Greenhouse Agreements

Legislation is amended to zero-rate the transfer of emissions units under a side agreement between the government and a party to an NGA.

Date published: 05 Nov 2010

Back to top