DP 10Cost of acquiring timber or right to take timber: other cases

1. For a person acquiring land with standing timber on it in a disposal to which section CB 25 (Disposal of land with standing timber) applies, the cost of acquiring the timber is the amount that is, under section CB 25, income of the person disposing of the land.

2. For a person acquiring timber or a right to take timber in a disposal or distribution to which section FB 6, FB 7, GC 1, or GC 2 (which relate to the disposal of trading stock) applies, the cost of acquiring the timber or the cost of acquiring a right to take timber is the amount treated as—

4. the consideration under sections FB 6 and FB 7 (which relate to the disposal of timber under a relationship agreement); or
5. the price realised under section GC 1 (Certain disposals of trading stock at below market value); or
6. the price realised under section GC 2 (Disposals of timber rights or standing timber).

7. Subsections (4) and (5) apply if—

8. a person (the transferor) disposes of timber, a right to take timber, or standing timber, to an associated person (the transferee); and
9. as a result, the transferor has an amount of income under section CB 24 or CB 25 (which relate to income from timber).

10. The deduction that the transferor is allowed for the cost of the timber, right to take timber, or standing timber must not be more than the amount of the income.

11. The deduction that the transferee is allowed for the cost of acquiring the timber is calculated on the basis that the transferee acquired the timber for the total of—

12. the cost to the transferee of acquiring the timber; and
13. the amount, if any, for which the transferor is denied a deduction under subsection (4).