A tax position is a decision that you might make when filing a tax return. An unacceptable tax position is a decision you've made that is more likely to be wrong than right.
UTP(Unacceptable Tax Position) ShortFall Penalty can be imposed in some instances.1
An area where unacceptable tax positions can arise is decisions on whether certain expenditures are of a capital or revenue nature. Whether expenditure is of a capital or revenue nature is not to be found by any rigid test or description but upon consideration of all the circumstances; if capital in nature, it is not deductible for income tax purposes. 2
Capital expenditures are denied a deduction. This rule is called capital limitation. 3
2.https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/pdfs/case-summaries/csum-21-02.pdf
3.https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1513558.html