Taking a position on new livestock tax rules
Federated Farmers will engage openly with Inland Revenue on new rules for the tax treatment of livestock.
‘‘Last October, the Minister of Revenue announced that the tax treatment of livestock will be reviewed and Federated Farmers has discussed this in detail with Inland Revenue,’’ said Bruce Wills, Federated Farmers president and its economics and commerce spokesman.
‘‘This review was confirmed in May’s Budget and forms part of a wider ranging review into how high-value assets are treated for tax purposes,’’ Mr Wills said.
‘‘Federated Farmers will now examine Inland Revenue’s proposals for reasonableness and real-world workability. Let me also stress that farmers do understand the importance of paying their fair share of tax.
‘‘With livestock, there’s been some concern at the ease with which farmers have switched between the Herd Scheme and the National Standard Cost Scheme. This is especially the case when livestock values are extremely volatile.
‘‘Broadly speaking, the Herd Scheme treats livestock as a capital asset using Inland Revenue’s national average market values. The National Standard Cost Scheme values purchased livestock at cost plus associated costs of husbandry. Farmers, as small and medium sized businesspeople, are heavily reliant on their accountant for tax advice. It’s a complicated area and you rely on your advisers to interpret it for you. Federated Farmers will now consult members to develop a position to take back to Inland Revenue,’’ Mr Wills said.