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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock - Definitions

EC 31: Enhanced production

You could also call this:

“Rules for valuing additional non-specified livestock due to increased production”

If you make money from non-specified livestock, this section applies when you increase your production. This can happen if you start or restart making money from non-specified livestock, bring land into production, or buy more land to raise non-specified livestock.

As a result, you might get more non-specified livestock over one to four years. These animals must not be replacement livestock or homebred livestock, and they must be valued at their standard value.

When you get these new animals, their closing value is different for the first two years:

In the first year, the closing value is the standard value plus two-thirds of the difference between what you paid for the livestock and its standard value.

In the second year, the closing value is the standard value plus one-third of the difference between what you paid for the livestock and its standard value.

For all other years after that, the closing value is just the standard value.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514428.

Topics:
Money and consumer rights > Taxes
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EC 30: Closing value methods, or

“How to value your non-specified livestock at the end of the income year”

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EC 32: Application of sections EC 33 to EC 37, or

“Rules for valuing expensive farm animals”

Part E Timing and quantifying rules
Valuation of livestock: Definitions

EC 31Enhanced production

  1. This section applies when a person who derives income from non-specified livestock—

  2. enhances production in an income year by—
    1. starting, or restarting, to derive income from non-specified livestock; or
      1. bringing land into production, or substantially increased production, for the purpose of deriving income from non-specified livestock; or
        1. acquiring additional land for the purpose of deriving income from non-specified livestock; and
        2. as a result, in an income year or over the following 3 income years, acquires more non-specified livestock that—
          1. is not replacement livestock; and
            1. is not homebred livestock; and
              1. is valued at its standard value.

              2. The closing value of the livestock acquired is,—

              3. for the income year in which the livestock was acquired, its standard value plus two-thirds of the difference between the cost price of the livestock and the standard value:
                1. for the following income year, its standard value plus one-third of the difference between the cost price of the livestock and the standard value:
                  1. for other income years, its standard value.

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                    Notes
                    • Section EC 31(1)(b): replaced (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 114(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                    • Section EC 31(2): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 114(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                    • Section EC 31(2)(a): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 114(3) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).