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Income Tax Act 2007

Income - Adjustments

CH 1: Adjustment for closing values of trading stock, livestock, and excepted financial arrangements

You could also call this:

“Calculating end-of-year values for stock, livestock, and certain financial items”

This part of the law talks about what happens at the end of a tax year if you have certain types of goods or financial items.

If you have trading stock, which is stuff you buy to sell, the law says you need to figure out how much it’s worth. The value of this stock counts as your income for that year.

If you have livestock, like farm animals, you also need to work out their value. This value is also counted as your income for the year.

The law also covers something called ‘excepted financial arrangements’. These are special types of financial items. If you have any of these that you plan to sell, you need to work out their value too. This value is added to your income for the year.

Lastly, if you lend shares to someone and have the right to get them back, the value of this right is also part of your income if the original shares were excepted financial arrangements.

The law tells you how to calculate the value of each of these things. It says you should use specific sections of the law to figure out the correct values.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512846.

Topics:
Money and consumer rights > Taxes
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Part C Income
Adjustments

CH 1Adjustment for closing values of trading stock, livestock, and excepted financial arrangements

  1. This section applies when a person has some or all of the following at the end of an income year:

  2. trading stock valued under subpart EB (Valuation of trading stock (including dealer’s livestock)):
    1. livestock valued under subpart EC (Valuation of livestock):
      1. excepted financial arrangements that are revenue account property valued under subpart ED (Valuation of excepted financial arrangements):
        1. a share supplier’s share-lending right, if the original shares that relate to the right are excepted financial arrangements described in paragraph (c).

          1. The value of the trading stock, calculated under section EB 3 (Valuation of trading stock), is income of the person in the income year.

          2. The value of the livestock, calculated under section EC 2 (Valuation of livestock), is income of the person in the income year.

          3. The value of the excepted financial arrangements or share-lending right, calculated under section ED 1 (Valuation of excepted financial arrangements), is income of the person in the income year.

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