Costs Deductible When No Income Following Earthquake

Question

I have a client who leased a motel then the Kaikoura earthquake happened and the motel needed repairs done to it before being able to open again. The landlord has not done any of the repairs in the 2019 income tax year, and therefore there has been no income. The client has still incurred costs such as legal bills fighting the landlord (they are currently in arbitration), insurance, accounting, rates, storage, depreciation etc. Are they still able to claim these expenses when there is no income for the year due to landlord not doing the repairs?

Answer

Expenses are able to be claimed even though there is no income coming in.  We also refer you to http://taxpolicy.ird.govt.nz/ news/2017-02-21-earthquake- rollover-relief.