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This determination may be cited as the Income Tax (National Standard Costs for Livestock) Determination 2016.
This determination applies in respect of the valuation of specified livestock under the national standard cost scheme for the 2015-2016 income years and subsequent income years.
This determination varies the Income Tax (National Standard Costs for Livestock) Determination 1993 and the Income Tax (National Standard Costs for Livestock) Determination 1994 by replacing, wherever they appear in these determinations, the following words:
"purchased" to "acquired"
"purchase" to "acquisition"
"sales" to "disposals"
This determination is signed by Rob Wells on 14 March 2016.
LTS Manager, Technical Standards
Legal and Technical Services
Section EC 24 of the Income Tax Act 2007 allows the Commissioner ("the CIR") to issue a determination stating the methods that may be used to calculate the value of specified livestock under the national standard cost scheme. The matters that may be included in such a determination are set out in section 91AAD of the Tax Administration Act 1994 ("the TAA"). To date these sections have been used to issue two determinations; the Income Tax (National Standard Costs for Livestock) Determination 1993 and the Income Tax (National Standard Costs for Livestock) Determination 1994. These determinations set out the methods used to calculate the cost of specified livestock, details of the provisions that apply to these valuations, the inventory system requirements under the national standard cost scheme, and the requirements for movement between national standard cost and other livestock valuation schemes.
Section 91AAD(9) of the TAA allows the CIR to vary the contents of determinations made under these sections. This subsection is here being utilised to vary the above determinations by issuing the Income Tax (National Standard Costs for Livestock) Determination 2016 ("the 2016 determination").
The variations contained in the 2016 determination replace the words "purchase" (to "acquisition"), "purchased" (to "acquired") and "sales" (to "disposals") and are made to confirm, for the avoidance of any doubt, that these transactions include those that involve the receipt or payment of non-monetary (as well as monetary) consideration. These changes are made as part of wider wording changes listed in Schedule 3 of the Taxation (Annual Rates for 2015-2016, Research and Development, and Remedial Matters) Act 2016.
Although the Commissioner acknowledges that the replacement words are capable of having a wide meaning, solely for the purposes of this determination it is emphasised that to come within the words used the transaction must be made for "consideration", whether that consideration be in money or some other form.
For the avoidance of doubt, it is therefore confirmed that the words used do not include the acquisition of homebred livestock or livestock that has been gifted inter-generationally or donated. In addition, the words used do not include the disposal of livestock that dies or is culled and is disposed of on-farm or to still-born livestock ("slinks"). Although slinks are generally sold for monetary consideration, it is the Commissioner’s view that being still-born, slinks are not livestock and therefore not subject to any of the national standard costs for livestock determinations. Note however that amounts received for slinks should continue to be treated as part of the ordinary business income of a farmer.