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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock

EC 9: Restrictions on use of national standard cost scheme

You could also call this:

“Rules for using the national standard cost scheme for valuing livestock”

You can’t use the national standard cost scheme to value your specified livestock in a year if you value any of your specified livestock using the cost price method in that same year.

If you used the cost price method in the year before you want to start using the national standard cost scheme, you need to tell the Commissioner at least 2 years before you switch. You do this by following the steps in section EC 11.

You also can’t use the national standard cost scheme for a type of livestock if you’re in a profit-sharing arrangement. This applies if you or someone else in the arrangement values that type of livestock using the cost price method.

The national standard cost scheme isn’t available if you’ve given your livestock to someone else for a long time, either as a bailment or a lease, unless it’s part of a profit-sharing arrangement.

Lastly, you can’t use the national standard cost scheme if a decision made under section EC 24 says you can’t use it for your livestock.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514361.

Topics:
Money and consumer rights > Taxes
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EC 8: Restrictions arising from use of herd scheme, or

“Rules for using the herd scheme to value livestock”

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EC 10: Restrictions on use of cost price method, or

“Rules for when you can't use the cost price method for valuing livestock”

Part E Timing and quantifying rules
Valuation of livestock

EC 9Restrictions on use of national standard cost scheme

  1. The national standard cost scheme is not available to a person to value specified livestock in an income year if they value any specified livestock in the income year under the cost price method.

  2. The national standard cost scheme is not available to a person to value specified livestock if, in the income year before the income year in which their election under section EC 7(2) is to apply, they have valued specified livestock under the cost price method, and have not given at least 2 income years’ notice in the way described in section EC 11 to the Commissioner of their election to value specified livestock under the national standard cost scheme.

  3. The national standard cost scheme is not available to a person to value a type of specified livestock in an income year if they have made specified livestock available to another person under a profit-sharing arrangement and, in the income year, the other person, or another person has also made livestock of the type available under the profit-sharing arrangement, values any livestock of the type under the cost price method.

  4. The national standard cost scheme is not available to a person to value specified livestock in an income year if—

  5. they have bailed the livestock to another person under a long-term bailment not made under a profit-sharing arrangement; or
    1. they have leased the livestock to another person under a long-term bailment not made under a profit-sharing arrangement.

      1. The national standard cost scheme is not available to a person to value specified livestock in an income year if a determination made under section EC 24 precludes the use of the national standard cost scheme for the livestock.

      Compare
      Notes
      • Section EC 9 list of defined terms notice: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).