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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock

EC 5: Transfer of livestock because of self-assessed adverse event

You could also call this:

“Rules for helping farmers by giving or selling animals cheaply during tough times”

If you give or sell animals for less than what they’re worth to help a farmer who’s having a tough time because of a bad event, there are special rules. These rules apply when you’re not related to the farmer you’re helping.

If you give the animals away for free, you and the farmer getting them should say they have no value on the day you give them. This means you won’t make any money from giving them away, and the farmer won’t have to pay for getting them.

If you sell the animals for a small amount, both you and the farmer should say they’re worth only what the farmer paid for them. This means you’ll only count the small amount as money you made, and the farmer will only count that amount as what they paid.

These rules help make it easier for farmers to help each other when times are tough, without worrying about tax problems.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514352.

Topics:
Money and consumer rights > Taxes
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“Rules for valuing and timing livestock transfers between farmers”

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EC 6: Application of sections EC 7 to EC 27, or

“Rules for valuing specific farm animals for tax purposes”

Part E Timing and quantifying rules
Valuation of livestock

EC 5Transfer of livestock because of self-assessed adverse event

  1. This section applies to livestock that is donated, or supplied for consideration with a value that is less than the market value of the livestock, to a recipient—

  2. for use in a farming or agricultural business that is affected by a self-assessed adverse event; and
    1. by a donor or supplier who is not associated with the recipient.

      1. The donor or supplier must treat the livestock as having, on the day of the transfer of the livestock,—

      2. no value, if the livestock is donated to the recipient:
        1. the value of the consideration provided by the recipient.

          1. The recipient must treat the livestock as having, on the day of the transfer of the livestock,—

          2. no value, if the livestock is donated to the recipient:
            1. the value of the consideration provided by the recipient.

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