Rewrite remedial items

2011 remedial changes the 2004 and 2007 Income Tax Acts on the recommendation of the Rewrite Advisory Panel.

Remedial changes have been made to the Income Tax Act 2007 and the Income Tax Act 2004 on the recommendation of the Rewrite Advisory Panel. The Panel lists the submissions and their recommendations on its websites.

In addition, there are also a number of minor drafting matters that have been brought to the attention of the Rewrite Advisory Panel, In general, these amendments consist of corrections of cross-references, spelling, punctuation, terminology, and consistency of drafting. The Rewrite Advisory Panel publishes lists of these maintenance items on its website.


At the time of reporting back the Income Tax Bill 2002, the Finance and Expenditure Committee expressed concern that the new, rewritten, legislation could contain unintended policy changes.

To alleviate that concern, the committee recommended that a panel of tax specialists review any submission that rewritten income legislation contains an unintended policy change. An unintended policy change is one that gives rise to a different outcome from the corresponding provision in Income Tax Act 1994. The Rewrite Advisory Panel performs this review function. The process for making a submission to the Panel is set out in its statement, RAP 001. This statement is published on the Panel's website.

In general, the Panel recommends that a provision is:

  • amended to counter the effect of an unintended change; or
  • identified in schedule 51 of the 2007 Act; or
  • contains no change in outcome when compared to its corresponding provision in the earlier Act.

The Finance and Expenditure Committee also noted in its commentary on the Income Tax Bill that there may be a situation in which: "... the Government of the day decides to retain the rewritten law without retrospective amendment".

The Committee went on to say:

  • Such a decision would be a change in policy, and the Inland Revenue Department would be obliged to require taxpayers to meet any increased tax. The department has advised us that it intends to inform taxpayers through an appropriate publication that, in such cases, where taxpayers rely on the transitional provisions, they will be required to meet the tax obligation but will not be subject to penalties, and any use of money interest incurred will be remitted. The taxpayer must have taken reasonable care and adopted a reasonable tax position under the old law. We agree with this approach ...

Inland Revenue has published two standard practice statements setting out how it will apply the penalty and interest rules within the context of the comments of the Finance and Expenditure committee referred to above. Those two statements are SPS 08/03, issued in relation to the 2007 Act (published TIB Vol 20, No 10, December 2008) and SPS 05/02, issued in relation to the 2004 Act (published TIB Vol 17, No 5, July-July 2005).

Application date

Unless otherwise stated all rewrite-related amendments will apply retrospectively, with effect from the beginning of the 2008-09 income year.