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Blackhole expenditure relief
Thursday 16 May 2013
News Release
Blackhole expenditure relief
In the Budget today, the Government announced its intention to provide tax deductions for six types of expenditure that previously fell in a tax ‘blackhole’ - that is the costs were not deducible upfront or depreciable over time.
The blackhole
expenditure that will now be deductible either upfront or
over time includes:
· legal and administrative
costs relating to patents and plant variety rights
·
costs of obtaining certain fixed life resource
consents
· the costs of abandoned resource
consents
· the costs of paying dividends (but not
the dividends themselves)
· certain costs of
running a public company including annual listing and
meeting fees.
Many taxpayers may be unaware that some of these costs were not already deductible and will need to review their position.
The Government has been lobbied by business for solutions to blackhole expenditures for many years and this response, albeit very limited, will be welcomed.
The new rules will apply from 2014/15.
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