What insurance premiums can NZ sole traders deduct?

New Zealand sole traders can deduct insurance premiums that relate to their business activities. The key test is whether the insurance is for a business asset or business risk. **Deductible insurance:** - Public liability insurance - Professional indemnity insurance - Business income protection insurance (partially — see below) - Vehicle insurance (business proportion if also used personally) - Tools and equipment insurance - Business premises insurance - Cargo and goods in transit insurance **Not fully deductible:** - Personal life insurance and personal income protection (generally not deductible for sole traders) - Business income protection: the premiums are deductible, but the payouts are taxable income **Note on income protection:** If you have business income protection (to cover lost income if you cannot work), the premiums are deductible. However, any payout you receive is treated as taxable income. Keep this in mind when planning your cover.

• Public liability and professional indemnity: 100% deductible
• Vehicle insurance: business proportion deductible
• Business income protection premiums: deductible (but payouts are taxable)
• Personal life insurance: generally not deductible
• Tools and equipment insurance: fully deductible