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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock

EC 11: Restrictions on making of elections

You could also call this:

“Rules for changing how you value livestock for tax purposes”

When you want to make changes to how you value your livestock for tax purposes, you need to tell the government. You do this by giving a notice to the Commissioner of Inland Revenue. Once you tell them about your choice, you can’t change it for the first year it applies.

There are two main types of notices you can give, depending on what you want to do:

  1. If you want to start using the herd scheme to value your livestock, or if you want to change how you calculate values within the herd scheme, you need to tell the Commissioner when you file your tax return for the year you want the change to start.

  2. If you want to stop using the herd scheme, or if you want to change between the national standard cost scheme and the cost price method, you need to tell the Commissioner earlier. You should do this when you file your tax return at least two years before the year you want the change to start.

When you give your notice, you need to include some important information:

  • The year you want the change to start
  • What kind of animals you’re talking about
  • How you value your animals now and how you want to value them in the future
  • If you’re using a special calculation method called a herd value ratio, you need to give extra details about how you worked it out

Remember, these rules are designed to help the government keep track of how farmers are valuing their animals for tax purposes. It’s important to follow them carefully so you don’t get into trouble with your taxes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514365.

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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”

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“Rules for valuing livestock owned by multiple people for tax purposes”

Part E Timing and quantifying rules
Valuation of livestock

EC 11Restrictions on making of elections

  1. This section specifies the 2 forms of notice that a person must give to the Commissioner and when each must be used. When a person notifies the Commissioner of an election under this section, the election is irrevocable in the first income year in which it applies.

  2. For the elections described in this subsection, a person must give notice by the date of filing their return of income for the income year in which the election is first to apply. The elections are—

  3. an election to value livestock of a particular type under the herd scheme, as described in section EC 14; and
    1. an election to adopt a herd value ratio or the Chatham Islands adjustment to the herd value ratio for livestock of any type when the income year is the first income year in which the particular livestock is valued under the herd scheme, as described in sections EC 17 to EC 19; and
      1. a later election, described in section EC 8(2)(b) and (c), to value livestock of a particular type under a valuation method other than the herd scheme.

        1. For the elections described in this subsection, a person must give notice by the date of filing their return of income for an income year that is at least 2 income years before the income year in which the election is first to apply. The elections are—

        2. an election to stop valuing specified livestock of a particular type under the herd scheme, except when the person continues to value some livestock of that type under the herd scheme or when another valuation method is available, as described in section EC 14(2); and
          1. an election, after the herd scheme has been adopted, to adopt a herd value ratio or recalculated herd value ratio or the Chatham Islands adjustment for any livestock type, as described in sections EC 17 to EC 19; and
            1. an election to value specified livestock under the national standard cost scheme when the person has, in the income year before the application of the new election, valued the same livestock under the cost price method; and
              1. an election to value specified livestock under the cost price method when the person has, in the year before the application of the new election, valued the same livestock under the national standard cost scheme.

                1. A notice of election must state—

                2. the income year in which the election is first to apply; and
                  1. the type, class, or other description of the applicable livestock; and
                    1. the existing and proposed methods of valuing the applicable livestock; and
                      1. for an election to use a herd value ratio or recalculated herd value ratio under section EC 17,—
                        1. the value assessed under section EC 17(4) of an average animal of each applicable class of livestock; and
                          1. the date on which the valuation of each animal was made; and
                            1. the name and address of the valuer.

                            Compare
                            Notes
                            • Section EC 11(2)(b): amended (with effect on 18 August 2011), on , by section 42 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section EC 11(2)(c): inserted (with effect on 18 August 2011), on , by section 42 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).