Guide IR264 (Rental Income – Tax rules for those who rent out residential property and holiday homes) explains that any rent paid in advance is taxable in the year it is received.
Key Principles from Legislation and Interpretations
Interpretation Statement: IS 16/06
The general rule, as stated in ITA Section BD 3(2), is that income is allocated to the year in which it is derived.Income Credited to an Account
According to ITA Section BD 3(4), if income is credited to an account and has not been accounted for earlier, it is considered "derived" when credited. This means:- Income credited to a bank account that hasn’t been recognized in earlier years must be allocated to the year it was credited.
Subpart BD of the ITA 2007
This section deals with Income, Deductions, and Timing, providing a framework for determining when income is derived and how it should be accounted for.