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Income Tax Act 2007

Recharacterisation of certain transactions - Transfers of relationship property

FB 16: Non-specified livestock

You could also call this:

"Rules for income from livestock when a relationship ends"

Illustration for Income Tax Act 2007

You have non-specified livestock that is transferred when a relationship ends. This transfer can affect your income from the livestock. You are treated as not starting to get income from the livestock because of the transfer. When you use the livestock to earn income and you were not earning income from it before, special rules apply. If the transfer happens in the first or second year of a 3-year period, you must follow the rules in section EC 31 as if you were the original owner. If land is transferred, you are treated as having acquired it on the same date the original owner got it. The rules in section EC 31 are important for working out your income from non-specified livestock. You need to consider these rules when the livestock is transferred. The transfer can affect how you earn income from the livestock.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516359.

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Topics:
Money and consumer rights > TaxesFamily and relationships > Marriage and partnershipsBusiness > Industry rules
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"Valuing livestock in a relationship settlement"

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"Tax rules for transferring expensive farm animals during a relationship split"

Part FRecharacterisation of certain transactions
Transfers of relationship property

FB 16Non-specified livestock

  1. Subsections (2) to (4) apply for the purposes of section EC 31 (Enhanced production) in an income year when—

  2. non-specified livestock is transferred on a settlement of relationship property; and
    1. because of the transfer, the transferee starts to derive, or once again derives, income from non-specified livestock.

      1. The transferee is treated as not starting to derive, or once again deriving income from non-specified livestock. However, the transfer is taken into account in working out whether any later acquisition by the transferee of non-specified livestock means that they start to derive, or once again derive, income from non-specified livestock.

      2. Subsection (4) applies when the transferee uses the non-specified livestock in deriving income and was not, before the transfer, deriving income from non-specified livestock.

      3. If the year of transfer falls in the first or second year of the 3-year period referred to in section EC 31(1)(b), the transferee must apply section EC 31(2) as if they were the transferor and the transfer had not taken place.

      4. For the purposes of section EC 31(1)(a)(ii) and (iii), if land is transferred on a settlement of relationship property, the transferee is treated as having acquired the land on the date it was acquired by the transferor.

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