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Income Tax Act 2007

Taxation of certain entities - Joint venturers, partners, and partnerships

HG 10: Disposal of livestock

You could also call this:

“Rules for selling livestock when bringing in new business partners”

When you sell some or all of your partner’s interests in a business to a new partner, this law applies if those interests include female breeding animals. This only happens when you and your partners use specific methods to value your animals for tax purposes. These methods are called the national standard cost scheme or the cost price method.

If you’re the new partner buying into the business, there’s a special rule that might affect how you value the animals at the end of the tax year. This rule helps figure out how much the animals are worth for tax purposes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1185089.

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Part H Taxation of certain entities
Joint venturers, partners, and partnerships

HG 10Disposal of livestock

  1. This section applies when a person (the exiting partner) disposes of some or all of their partner's interests to an entering partner and section HG 3(3) applies, to the extent to which those interests include specified livestock and that specified livestock includes female breeding livestock and, for the income year, the partners use—

  2. the national standard cost scheme for specified livestock, described in section EC 22 (National standard cost scheme); or
    1. the cost price method for specified livestock, described in section EC 25 (Cost price, replacement price, or market value).

      1. Section EC 26B (Entering partners' cost base) may apply to the entering partner for the purposes of determining the value of the specified livestock at the end of an income year for the purposes of section EC 2 (Valuation of livestock).

      Notes
      • Section HG 10: substituted (with effect on 1 April 2009), on , by section 276(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
      • Section HG 10(1): amended (with effect on 1 April 2009), on , by section 189(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
      • Section HG 10 list of defined terms entering partner: inserted (with effect on 1 April 2009), on , by section 189(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).