Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Recharacterisation of certain transactions - Transfers of relationship property

FB 14: Specified livestock

You could also call this:

“Rules for transferring farm animals during a relationship property settlement”

When you transfer specified livestock as part of a relationship property settlement, there are special rules. These rules apply if you used the livestock for your business (but not if your business was dealing in livestock), and you owned the livestock at the start of the year you transferred it. The rules don’t apply if you use the herd scheme to value your livestock.

When you transfer the livestock, it’s treated as if you sold it and the other person bought it. The price is set at the value you used for the livestock at the end of the tax year before you transferred it. This value comes from the rules about valuing livestock and trading stock.

These rules override other rules about selling trading stock for less than it’s worth.

If you want to know more about valuing specified livestock, you can check sections EC 6 to EC 26. For information about the herd scheme, look at section FB 15. The rules about valuing livestock are in subpart EC, and the rules about trading stock are in section EA 1. The rules this section overrides are in sections GC 1 and GC 2.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516355.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
Family and relationships > Marriage and partnerships
Previous

FB 13: Trading stock, or

“Rules for taxing trading stock transferred in relationship property settlements”

Next

FB 15: Specified livestock valued under herd scheme, or

“Rules for transferring herd-scheme livestock in relationship property settlements”

Part F Recharacterisation of certain transactions
Transfers of relationship property

FB 14Specified livestock

  1. This section applies for the purposes of sections EC 6 to EC 26 (which relate to the valuation of specified livestock) when—

  2. specified livestock is transferred on a settlement of relationship property; and
    1. the transferor used the livestock in the carrying on of a business other than a business of dealing in livestock, and held the livestock at the start of the year of transfer; and
      1. the value of the livestock is not determined under the herd scheme, see section FB 15.

        1. The transfer is treated as a disposal and acquisition for an amount equal to the value that the transferor determined under subpart EC (Valuation of livestock) and took into account in section EA 1 (Trading stock, livestock, and excepted financial arrangements) at the end of the income year before the year of transfer.

        2. This section overrides sections GC 1 and GC 2 (which relate to the disposal of trading stock for inadequate consideration).

        Compare