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EC 12: Interests in livestock
or “Rules for valuing livestock owned by multiple people for tax purposes”
You could also call this:

“Rules for valuing farm animals when partnerships change”

When a group of people who own farm animals together (called a partnership) changes, there are some rules about how to count and value those animals. This is important for figuring out how much tax they need to pay.

If you’re part of a new group (or partnership) that owns farm animals, and most of the people in your new group used to be in an old group that owned the same kind of animals, you need to follow special rules. These rules apply when more than half of what your new group owns belonged to people who were in the old group and who made money from the same kind of farm animals in the current or last year.

When you’re counting and valuing your animals at the end of the year your new group was formed, you need to do it the same way the old group would have done it. This is true even if the old group doesn’t have any of those animals left. In that case, you should imagine how they would have counted and valued the animals if they still had them.

This helps make sure that the value of the animals is counted fairly, even when the group of owners changes.

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Next up: EC 14: Herd scheme

or “Rules for valuing farm animals using the herd scheme”
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Part E Timing and quantifying rules
Valuation of livestock

EC 13Changes in partnership interests

  1. This section applies when—

  2. a partnership owns specified livestock (the old partnership); and
    1. a new partnership is formed (the new partnership); and
      1. at the end of the income year in which the new partnership is formed, more than 50% of the property of the new partnership is owned by persons who, during that income year or in the previous income year,—
        1. owned all the property of the old partnership; and
          1. derived income in either income year from specified livestock of the same type as that owned by the new partnership.

          2. The value of specified livestock owned by the new partnership must be taken into account in the way the old partnership determines the value of livestock of the particular type at the end of the income year in which the new partnership is formed. If the old partnership has no specified livestock of the type on hand at the end of the income year, the value is taken into account as the old partnership would have determined it, had it owned specified livestock of that type.

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