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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 livestock not on the official list when given in a divorce or separation”

This part of the law is about non-specified livestock, which are animals that aren’t named in a specific list. It tells you what happens when these animals are given to someone else as part of a relationship property settlement.

If you get non-specified livestock this way, and you start making money from them (or start making money from them again), the law treats you as if you didn’t just start making money from them. But if you get more of these animals later, that might count as starting to make money from them.

If you weren’t making money from non-specified livestock before, but now you are because of the animals you were given, there’s a special rule. If you got the animals in the first or second year of a three-year period mentioned in section EC 31(1)(b), you have to follow the rules in section EC 31(2) as if you were the person who gave you the animals, and as if the transfer never happened.

Also, if you get land as part of a relationship property settlement, the law acts like you got the land on the same day the person who gave it to you first got it. This is important for some other rules about making money from non-specified 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.

Topics:
Money and consumer rights > Taxes
Family and relationships > Marriage and partnerships
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“Rules for transferring herd-scheme livestock in relationship property settlements”

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FB 17: High-priced livestock, or

“Rules for valuing high-priced livestock when settling relationship property”

Part F Recharacterisation 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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