Income Tax Act 2007 section 28

Order of deducting tax reductions: other persons

Section 28 sets out the order in which tax reductions must be deducted for taxpayers who are not individuals, such as trustees or other non-individual entities, as part of the income tax calculation.

• Tax reductions should be deducted in the order that produces the greatest overall reduction in the taxpayer's income tax liability for the year
• Double taxation relief — whether under a treaty arrangement or unilateral relief for foreign tax — must always be deducted last, after all other tax reductions
• Where the taxpayer is a trustee entitled to vulnerable beneficiary relief, that relief must be deducted after every other tax reduction, including double taxation relief
• These ordering rules apply only to non-individual taxpayers; separate rules exist for individuals