Section EC 17 — Income Tax Act 2007: Herd value ratio

EC 17 Herd value ratio Adoption of herd value ratio (1) A herd value ratio is available for a person to use in determining the value of specified livestock in the herd scheme. A person may adopt a herd value ratio for herd livestock of a particular type by giving notice in the way described in section EC 11 . A person may also adopt a recalculated ratio by giving notice in the same way. Chatham Islands livestock (2) Herd value ratios calculated under subsection (5) do not apply to livestock on the Chatham Islands. The Chatham Islands adjustment to the herd value ratio is dealt with in section EC 19 . When herd value ratio applies (3) When a person adopts a herd value ratio for livestock of a particular type, the ratio applies in the income year specified in the notice and in later income years until— (a) the income year in which it is superseded by a recalculation of the ratio; or (b) the income year in which the person stops valuing, under an election, livestock of that type under the herd scheme; or (c) the income year following 2 consecutive income years in which the person has not valued livestock of that type under the herd scheme. Assessment of average value (4) For the purpose of calculating a herd value ratio, a person must obtain from a recognised livestock valuer an assessment of the value of an average animal of that person in each applicable class of livestock. The value is determined as at the 30 April that is closest to the day on which the national average market values are set. Calculation of herd value ratio (5) The herd value ratio for livestock of a particular type is calculated by using the formula in subsection (6) and rounding the result of the calculation to the nearest of the following figures: 0.9, 1.0, 1.1, 1.2, 1.3. Formula (6) The formula is— Σ(average value × number) Σ(herd value × number). Definition of items in formula (7) In the formula,— (a) Σ is the total of the individual calculations for all applicable classes of livestock type valued under the herd scheme: (b) average value is the average value of an animal in a class as described in subsection (4): (c) number is the number of all livestock of that class on hand at the end of the income year, including livestock that are not in the herd scheme, but not including high-priced livestock: (d) herd value is the herd value of livestock for a class. Defined in this Act: class , herd livestock , herd scheme , herd value , herd value ratio , high-priced livestock , income year , livestock on the Chatham Islands , national average market value , notice , specified livestock , type , Compare: 2004 No 35 s EC 17