More live­stock val­u­a­tion changes lurk­ing around the cor­ner

Matamata Chronicle - - Rural Delivery - By TREVOR COOPER Coop­eraitken

Par­lia­ment has passed leg­is­la­tion putting in place changes to live­stock val­u­a­tion that have been her­alded for some time. But now it seems there are even more changes around the cor­ner.

Al­though no of­fi­cial an­nounce­ments have been made, it is un­der­stood the meth­ods that In­land Rev­enue use to set National Stan­dard Cost (NSC) val­ues each year is be­ing re­viewed and is likely to mean that the val­ues will in­crease dra­mat­i­cally.

For the 2013 year a 2-year-old heifer bred on the farm from birth will be val­ued un­der the NSC scheme at $592.50, made up of the 2012 breed­ing, rear­ing and grow­ing cost for a ris­ing 1- year of $473.30 and a rear­ing and grow­ing cost for 2013 for a ris­ing 2-year an­i­mal of $119.20.

Un­der what is pro­posed, it is pos­si­ble that the value of the 2-year heifer may in­crease to as much as $1200, in ef­fect 200 per cent of the present value.

This will have a ma­jor ef­fect on the tax­able in­come of those farm­ers with a large por­tion of their herd val­ued us­ing NSC. It is un­der­stood there may be some spread­ing of the in­crease in value over two or three years, but the pro­posal will see some farm­ers’ tax bills in­crease sub­stan­tially as the change is im­ple­mented.

A con­firmed fur­ther change for the 2014 tax year will see the com­bin­ing of friesians and jer­seys; th­ese breeds will no longer be sep­a­rated out for val­u­a­tion pur­poses. The ef­fect of this is that friesians will be val­ued slightly lower while jersey val­ues will rise. Elec­tions to Join the Herd Scheme: Once an elec­tion to join the herd scheme is in place then a tax­payer can no longer elect to exit out of the scheme. Ex­tra live­stock above the herd scheme base num­ber can still be val­ued us­ing the al­ter­na­tive meth­ods avail­able.

As­so­ci­ated Party trans­fers: Where live­stock is sold be­tween as­so­ci­ated per­sons then the buyer is re­quired to use the seller’s herd scheme elec­tions and base num­bers. An ex­cep­tion to this ap­plies where, in limited cir­cum- stances, stock is sold as part of an in­ter-gen­er­a­tional dis­posal.

Ces­sa­tion of Farm­ing: Leg­is­la­tion now re­quires farm­ers ceas­ing live­stock farm­ing to use the pre­vi­ous year’s herd value if the live­stock is sold prior to Novem­ber 1, while any dis­pos­als af­ter Novem­ber 1 will use the herd val­ues from the cur­rent year.

Trevor Cooper, Di­rec­tor Coop­erAitken, Ac­coun­tants Mor­rinsville and Mata­mata Tel: 07 889 7153 coop­

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