Extension of the redundancy tax credit
2011 legislation further delays the redundancy tax credit following the 2011 Canterbury earthquake.
Subpart ML, sections MA 1, ML 1, ML 2 and YA 1 of the Income Tax Act 2007 and section 95 of the Taxation (Budget Measures) Act 2010
As part of Budget 2010, the redundancy tax credit was cancelled with effect for redundancies after 30 September 2010, the date that the 33% tax rate applied from. Following the 4 September 2010 earthquake, this was reconsidered and cancellation was delayed so that it applied to redundancies after 31 March 2011.
As a consequence of the 22 February 2011 earthquake, the cancellation of the redundancy tax credit has been further delayed so that it will now apply to redundancies up to 30 September 2011. If the redundancy is on or before 30 September 2011, the tax credit will apply according to subpart ML.
On 1 April 2012 subpart ML, the section YA 1 redundancy definition and the section MA 1 reference will be repealed.
The extension is treated as coming into force on 1 April 2011, the previous date of cancellation.
The cancellation is effective 30 September 2011, and the relevant legislation is itself repealed on 1 April 2012.