Section EC 26 — Income Tax Act 2007: Bailee’s treatment of livestock

EC 26 Bailee’s treatment of livestock When this section applies (1) This section applies when, under a bailment, lease, or other agreement,— (a) a person ( person A ) has the use of specified livestock; and (b) person A is required— (i) to return the livestock to the person who made it available; or (ii) to pay the person full compensation for it. Closing livestock numbers (2) Person A is treated as owning, and must take into account at the end of an income year, the total number for all classes calculated using the formula— total livestock − bailed livestock. Definition of items in formula (3) In the formula,— (a) total livestock is all the livestock that person A has on hand in a class at the end of the income year, including— (i) the livestock that they own; and (ii) the livestock that they have the use of under the bailment, lease, or other agreement: (b) bailed livestock is all the livestock in a class that person A has been given the use of under a bailment, lease, or other agreement that remains in force at the end of the income year. Result of applying formula (4) If the result of applying the formula in subsection (2) is positive, person A is treated as the owner of any surplus livestock. If the result is negative, person A must adjust the total number described in subsection (2) by treating it as a negative number. Defined in this Act: class , income year , lease , pay , specified livestock , Compare: 2004 No 35 s EC 26