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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock - Definitions

EC 40: Later income years in breeding business

You could also call this:

“Calculating bloodstock value in subsequent breeding business years”

In the years following the first year of your breeding business, you need to calculate the value of your bloodstock animals. This value is called the closing value.

To find the closing value, you start with the opening value of the bloodstock and subtract a reduction. The opening value is usually the same as the closing value from the year before.

If you didn’t use a closing value in the previous year, you can use the cost price of the bloodstock instead. You then subtract the reduction from this cost price.

The amount you reduce depends on rules set out in other parts of the law. These rules are explained in sections EC 41, EC 42, EZ 5, or EZ 6 of the Income Tax Act.

Remember, you need to do this calculation for each year you’re in the breeding business, starting from the second year onwards.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514452.

Topics:
Money and consumer rights > Taxes
Previous

EC 39C: Setting and publication of national minimum price threshold, or

“How the Commissioner sets and shares minimum prices for horse sales”

Next

EC 41: Reduction: bloodstock not previously used for breeding in New Zealand other than as shuttle stallions, or

“Reducing tax value for certain horses not previously bred in New Zealand”

Part E Timing and quantifying rules
Valuation of livestock: Definitions

EC 40Later income years in breeding business

  1. This section applies to the income years that follow the first income year described in section EC 39.

  2. The closing value of the bloodstock is its opening value minus the reduction applying in that income year.

  3. If the person has not taken the closing value of the bloodstock into account in the previous income year, the closing value is the cost price of the bloodstock minus the reduction applying in the income year in which the person makes the calculation.

  4. The reduction that applies is determined under section EC 41, EC 42, EZ 5, or EZ 6 (which relate to bloodstock).

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