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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:

"Income from livestock you get in a relationship settlement"

Illustration for Income Tax Act 2007

When non-specified livestock is transferred because of a relationship property settlement, you start to derive income from it. You are treated as not starting to derive income from the livestock, but the transfer is considered later. If you use the livestock to derive income and did not have income from it before, special rules apply, such as following section EC 31 as if you were the original owner.

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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:
Family and relationships > Marriage and partnershipsMoney and consumer rights > Taxes
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"Valuing livestock when settling relationship property"

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FB 17: High-priced livestock, or

"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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