Inland Revenue

Income Tax Act 1976

Income Tax (National Standard Costs for Livestock Determination) 1993

Title and Application

1. This determination may be cited as the Income Tax (National Standard Costs for Livestock Determination) 1993.

This determination applies in respect of the valuation of specified livestock under the national standard cost scheme for the 1992-93 income year and subsequent years. Any taxpayer valuing any specified livestock in accordance with the provisions of section 86C of the Income Tax Act 1976 shall calculate the cost of such livestock on hand at the end of the income year in accordance with this determination.

For the purposes of this determination where a taxpayer separately accounts for more than one livestock business under national standard cost then national standard cost in relation to the livestock used in each of those businesses shall be calculated separately.

Interpretation

2. In this determination, unless the context otherwise requires,—

Expressions used have the same meanings as in sections 2, 2A and sections 85 to 86L of the Income Tax Act 1976.

References to an income year shall include reference to any corresponding non-standard accounting year.

“Act” means the Income Tax Act 1976:

“Bobby calves” mean, in respect of a taxpayer, calves—

(a) Bred from a dam which is a female of the dairy cattle livestock type; and

(b) Acquired by the taxpayer for rearing; and

(c) Which have not been weaned before acquisition from a diet of milk (and/or milk substitute) when acquired by the taxpayer; and

(d) Which were not purchased as progeny at foot along with the calf's dam.

“Breeding sires” means, in respect of a taxpayer, male livestock used or intended to be used by the taxpayer for breeding purposes:

“Cost flow identification” means inventory accounting treatments which account for costs relating to livestock intakes in calculating the closing value of livestock on hand in an income year:

“Immature inventory grouping” means all livestock of a type which are rising one year of age at closing balance date and the immature inventory grouping of any livestock type may be separated into sub-groups on the basis of those livestock used for or intended to be used by the taxpayer for breeding purposes, and those livestock not used for or not intended to be used for breeding purposes:

“Inventory grouping” means the classes of livestock included in an inventory group, for each type of livestock on hand at the closing balance date for an income year:

“Livestock” means specified livestock:

“Livestock intake” means, for purposes of inventory accounting, the maturing livestock or mature livestock first entering the taxpayer's inventory system in an income year:

“Mature inventory grouping” means, in respect of a taxpayer's livestock of any type and any income year:

(a) In the case of sheep, cattle, deer or goats, all classes of such livestock which are older than one year of age at the end of the income year, other than male non-breeding cattle;

(b) In the case of cattle, rising three year or older male non-breeding cattle; and

(c) In the case of pigs, all classes of pigs or, at the taxpayer option, only those classes of pigs which are older than one year of age at the end of the income year;

but shall exclude:

(d) Breeding sires, where the herd scheme is being used in conjunction with national standard cost for any of that livestock type; and

(e) Livestock required to be valued under the high-priced livestock scheme,—

and the mature inventory grouping of any livestock type may be separated into sub-groups on the basis of those livestock used for or intended to be used by the taxpayer for breeding purposes, and those livestock not used for or not intended to be used for breeding purposes:

“Mature livestock” means, in respect of an income year, livestock which is on hand at the start of the income year:

(a) In the case of male non-breeding cattle, rising three years of age or older;

(b) In the case of sheep, cattle (other than male non-breeding cattle), goats and deer, rising two years of age or older; or

(c) In the case of pigs, rising one year of age or older:

“Maturing livestock” means, in respect of an income year, livestock which if owned at the end of the income year, would be:

(a) In the case of male non-breeding cattle, rising three years of age (or older in the case of non-breeding male cattle purchased in the income year);

(b) In the case of pigs, rising one year of age (or older in the case of pigs purchased in the income year);

(c) In the case of other livestock, rising two years of age (or older in the case of such livestock purchased in the income year):

“National average market value” means, in respect of any class of specified livestock and any income year, the value declared by the Governor-General by Order in Council in accordance with section 86G of the Act:

“National standard cost” means, in respect of livestock being—

(a) Rising one year sheep, dairy cattle, beef cattle, deer or goats born in the income year and owned by the taxpayer at birth:

(b) Opening rising one year livestock on hand at the beginning of the income year through to rising two years of age for sheep, beef cattle, dairy cattle, deer and goats:

(c) Opening rising two year male non-breeding beef cattle which are rising three years of age at closing balance date:

(d) Bobby calves acquired during the income year:

(e) Weaner pigs to 10 weeks of age (excluding sucklings):

(f) Growing pigs from 10 to 17 weeks of age,—

the respective production costs, based on national average costs of production, declared by the Governor-General by Order in Council under section 86C of the Act:

“Non-breeding” means, in respect of a taxpayer, livestock not intended to be used for breeding purposes by the taxpayer.