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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock

EC 7: Valuation methods

You could also call this:

“How to choose and use methods for valuing farm animals for tax purposes”

When you need to value your farm animals for tax purposes, you have several methods to choose from. You can use the herd scheme, the national standard cost scheme, or one of the cost price, replacement price, or market value methods. There’s also another method described in a separate section of the law.

You need to pick one of these methods and use it when you file your tax return for the year. Once you’ve chosen a method, you’ll keep using it in future years unless you decide to switch to a different one that’s allowed for you.

If you accidentally choose a method that isn’t available to you and don’t make a proper choice later, the tax office will decide which method you should use. They’ll talk to you about it before they make their decision.

There are some rules about which valuation methods you can use in different situations. These rules are explained in other parts of the law.

Sometimes, when you choose a method, you might need to let the tax office know in a special way. The usual rule about choosing your method in your tax return doesn’t apply in these cases.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514357.

Topics:
Money and consumer rights > Taxes
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EC 6: Application of sections EC 7 to EC 27, or

“Rules for valuing specific farm animals for tax purposes”

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EC 8: Restrictions arising from use of herd scheme, or

“Rules for using the herd scheme to value livestock”

Part E Timing and quantifying rules
Valuation of livestock

EC 7Valuation methods

  1. The methods available for valuing specified livestock are—

  2. the herd scheme described in sections EC 14 to EC 21:
    1. the national standard cost scheme described in sections EC 22 to EC 24:
      1. 1 of the cost price, replacement price, or market value methods described in section EC 25:
        1. the method described in section EC 26.

          1. A person must choose which method to use, making their election by using the method chosen in their return of income for the income year.

          2. When a person chooses a valuation method, that method continues to apply in the following income years unless they choose another method that is available to them.

          3. If a person chooses a valuation method that is not available to them and they later make no effective election, the Commissioner must determine the method to be used. In doing so, the Commissioner must consult the person.

          4. Restrictions apply to the use of valuation methods, as described in sections EC 8 to EC 10.

          5. Subsection (2) does not apply to the extent to which an election requires a notice under section EC 11.

          Compare
          Notes
          • Section EC 7(5) heading: replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 40(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section EC 7(5): replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 40(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section EC 7(6) heading: inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 40(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section EC 7(6) heading: amended, on , by section 13 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
          • Section EC 7(6): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 40(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section EC 7 list of defined terms notice: inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 40(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).