Section EB 24 — Income Tax Act 2007: Apportionment on disposal of business assets that include trading stock

EB 24 Apportionment on disposal of business assets that include trading stock When this section applies (1) This section applies when a person disposes of trading stock together with other assets of a business to another person. This section also applies if a person disposes of an interest in trading stock together with other assets of a business or an interest in those other assets, whether or not the disposal of the partial interest is to another person. Apportionment (2) The total amount received on disposal must be apportioned between the trading stock and the other assets in a way that reflects their respective market values. Purchase price (3) The amount apportioned to the trading stock under subsection (2) is treated as the price paid for it by the buyer. Disposals of timber (4) For the purposes of this section, a disposal of timber is treated as— (a) including the creation or grant of a right to take timber: (b) including a disposal of land with standing timber except to the extent to which the timber is any of the following: (i) trees that are ornamental or incidental, as evidenced by a certificate given under section 44C of the Tax Administration Act 1994; or (ii) timber subject to a forestry right, as defined in section 2 of the Forestry Rights Registration Act 1983, registered under the Land Transfer Act 1952; or (iii) timber subject to a profit a prendre granted before 1 January 1984. Transfers under settlement of relationship property (5) A disposal under this section includes a transfer under a settlement of relationship property. Defined in this Act: amount , business , dispose , financial arrangement , financial arrangements rules , land , market value , registered bank , right to take timber , settlement of relationship property , timber , , trading stock Compare: 2004 No 35 ss FB 4 , FF 13(1) Section EB 24(1): amended (with effect on 1 April 2008), on 7 September 2010, by section 27(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).