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EZ 3: Petroleum development expenditure from 1 October 1990 to 15 December 1991
or “Deductions for oil and gas development costs from late 1990 to late 1991”
You could also call this:

“How to value livestock leased out before September 1992”

You can value your livestock in a special way if you meet certain conditions. This applies if you owned livestock in the 1991-92 income year and valued it under a specific rule. It also applies if, on 2 September 1992, you had an agreement to let someone else use your livestock, or if you had a contract to do so.

If you meet these conditions, you can value your livestock at 70% of what’s called the ‘rolling average value’. The rolling average value is the average of the market values for that type of livestock over the last three years.

You can use this special valuation for the 1992-93 income year and later years, as long as the livestock is still being used by the other person under your agreement.

There’s a limit on how many animals you can value this way. It’s the smallest number out of:

  • The number of animals in your agreement
  • The number of animals in the agreement at the end of the 1992-93 income year
  • The smaller of the opening and closing numbers of animals in the agreement in later years

This special rule is part of the Income Tax Act 2007 and helps figure out how much your livestock is worth for tax purposes.

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Next up: EZ 4B: Cattle destroyed because of Mycoplasma bovis: spreading

or “Spreading income over six years for cattle culled due to Mycoplasma bovis”
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Part E Timing and quantifying rules
Terminating provisions

EZ 4Valuation of livestock bailed or leased as at 2 September 1992

  1. This section applies when—

  2. an owner of livestock valued a class of livestock for the 1991–92 income year under section 86 of the Income Tax Act 1976 (as that section was in force before its repeal by section 21 of the Income Tax Amendment Act (No 2) 1993); and
    1. either—
      1. the livestock was, as at 2 September 1992, at the use of a person under a bailment, lease, or other agreement that the owner entered into on or before that date, or was, on or before that date, livestock that was subject to a binding contract to bail or lease the livestock to a person, or otherwise allow them to use the livestock; or
        1. the class of livestock was not one that the owner had on hand in the previous income year, but was a class that, as at 2 September 1992, was at the use of a person under a bailment, lease, or other agreement that the owner entered into on or before that date.

        2. The owner may value the livestock at a value equal to 70% of the rolling average value of that class of livestock.

        3. Subsection (2) applies for the 1992–93 income year and any later income year in which the livestock continues to be bailed, leased, or otherwise used by the person under the bailment, lease, or other agreement.

        4. The number of specified livestock of a class that may be valued under this section is the number that is the least of—

        5. the number of livestock of the class bailed, leased, or otherwise used (or, for a binding contract entered into before 2 September 1992 but not yet applying, the number of livestock of that class provided for in the contract); and
          1. the number of livestock of the class bailed, leased, or otherwise used as at the end of the 1992–93 income year; and
            1. the lesser of the opening and closing number of stock of the class bailed, leased, or otherwise used in a later income year up to and including the income year in which the livestock is being valued.

              1. In this section, rolling average value, for an income year and a class of specified livestock, means one-third of the sum of the national average market values set for that income year and each of the 2 previous income years for livestock of that class.

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