Section DP 10 — Income Tax Act 2007: Cost of acquiring timber or right to take timber: other cases

DP 10 Cost of acquiring timber or right to take timber: other cases Acquiring land with standing timber (1) For a person acquiring land with standing timber on it in a disposal to which section CB 25 (Disposal of land with standing timber) applies, the cost of acquiring the timber is the amount that is, under section CB 25, income of the person disposing of the land. Recharacterisation or avoidance (2) For a person acquiring timber or a right to take timber in a disposal or distribution to which section EB 24 , FB 6 , FB 7 , GC 1 , or GC 2 (which relate to the disposal of trading stock) applies, the cost of acquiring the timber or the cost of acquiring a right to take timber is the amount treated as— (a) the price paid or realised under section EB 24 (Apportionment on disposal of business assets that include trading stock); or (b) the consideration under sections FB 6 and FB 7 (which relate to the disposal of timber under a relationship agreement); or (c) the price realised under section GC 1 (Disposals of trading stock at below market value); or (d) the price realised under section GC 2 (Disposals of timber rights or standing timber). Transfers between associated persons (3) Subsections (4) and (5) apply if— (a) a person (the transferor ) disposes of timber, a right to take timber, or standing timber, to an associated person (the transferee ); and (b) as a result, the transferor has an amount of income under section CB 24 or CB 25 (which relate to income from timber). Limit on deduction for transferor (4) The deduction that the transferor is allowed for the cost of the timber, right to take timber, or standing timber must not be more than the amount of the income. Transferee’s deduction (5) The deduction that the transferee is allowed for the cost of acquiring the timber is calculated on the basis that the transferee acquired the timber for the total of— (a) the cost to the transferee of acquiring the timber; and (b) the amount, if any, for which the transferor is denied a deduction under subsection (4). Defined in this Act: amount , associated person , dispose , income , pay , right to take timber , standing timber , timber , Compare: 2004 No 35 ss DP 9 , GD 15 Section DP 10(5): amended (with effect on 1 April 2008), on 7 December 2009, by section 14(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).