Income Tax Act 2007

Recharacterisation of certain transactions - Transfers of relationship property

FB 17: High-priced livestock

You could also call this:

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

When you transfer high-priced livestock as part of a relationship property settlement, it affects your taxes. You treat the transfer as if you sold the livestock and the other person bought it for the same amount you originally paid. The other person is considered to have acquired the livestock on the same day you did. You need to work out the value of the livestock at the end of the year it was transferred, taking into account its original cost and how much it has depreciated, as set out in section EC 34(2). If you had chosen a specific method to value the livestock, the other person is also considered to have made that choice, and the reduction in value is calculated according to section EC 34(3). If you did not choose a specific method, the other person can choose a method, but only if you acquired the livestock in the same year it was transferred, using the methods in section EC 34(2) and (3).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516361.

This page was last updated on 5 April 2026 — View changes

Topics:

Money and consumer rights > TaxesFamily and relationships > Marriage and partnershipsFamily and relationships > Children and parentingFarming and fishing > Farming

FB 16: Non-specified livestock, or

"Income from livestock you get in a relationship settlement"

FB 18: Bloodstock, or

"Tax rules for horses given as part of a settlement"

Part FRecharacterisation of certain transactions
Transfers of relationship property

FB 17High-priced livestock

This section applies for the purposes of sections EC 32 to EC 37 (which relate to the valuation of high-priced livestock) when high-priced livestock is transferred on a settlement of relationship property.
The transfer is treated as a disposal and acquisition for an amount equal to the cost of the livestock to the transferor. The transferee is treated as having acquired the livestock on the day it was acquired by the transferor.
In determining the value of the livestock at the end of the year of transfer, the transferee must take into account the amount referred to in subsection (2) reduced by the depreciation percentage of its cost price under section EC 34(2) (General rule). Subsection (4) overrides this subsection.
If the transferor had chosen to apply the diminishing value method to the valuation of the livestock, the transferee is treated as also having made that choice, and the reduction is calculated under section EC 34(3). But if the transferor had not chosen to apply the diminishing value method, the transferee may make a choice between the methods set out in section EC 34(2) and (3) only if the livestock was acquired by the transferor in the year of transfer.

Compare

2004 No 35 s FF 11

Notes

Section FB 17 list of defined terms dispose: inserted, on 24 February 2016, by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).