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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock - Definitions

EC 47: Change of use of bloodstock in course of business

You could also call this:

“Rules for changing how you use horses in a breeding business”

If you own bloodstock and run a business of breeding them for sale or exchange, there are some rules about changing how you use these animals. Bloodstock means horses used for racing or breeding.

If you start using your bloodstock for something other than your breeding business, the law says it’s like you sold them. This ‘sale’ is considered to happen on the day you change how you use the bloodstock. The value of this ‘sale’ is what the bloodstock is worth on that day.

On the other hand, if you’ve been using your bloodstock for other things and then start using them in your breeding business, it’s treated like you bought them. This ‘purchase’ is considered to happen on the day you start using the bloodstock in your business. The value of this ‘purchase’ is what the bloodstock is worth on that day.

These rules help to keep track of the value of your bloodstock when you change how you use them in your business.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514473.

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Money and consumer rights > Taxes
Business > Industry rules
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EC 46: Use of bloodstock for racing, or

“Rules for treating racing bloodstock as part of your breeding business”

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EC 47B: Removal of high-priced bloodstock from New Zealand after earlier deductions, or

“Tax consequences for exporting expensive racehorses before use in New Zealand”

Part E Timing and quantifying rules
Valuation of livestock: Definitions

EC 47Change of use of bloodstock in course of business

  1. If a bloodstock owner who is in the business of breeding bloodstock for sale or exchange starts to use bloodstock other than in the course of the business, they are treated as having disposed of the bloodstock. The disposal is treated as having occurred at market value on the day on which they changed the use of the bloodstock.

  2. If a bloodstock owner who is in the business of breeding bloodstock for sale or exchange has been using bloodstock for other purposes, and they start to use the bloodstock in the course of the business, the bloodstock is treated as having been acquired by the bloodstock owner. The acquisition is treated as having occurred at market value on the day on which the bloodstock owner changed the use of the bloodstock.

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Notes
  • Section EC 47(1): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EC 47(2): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).