Section EC 4 — Income Tax Act 2007: Transfers of livestock within wholly-owned groups

EC 4 Transfers of livestock within wholly-owned groups When this section applies (1) This section applies in an income year to livestock held by a company that is part of a wholly-owned group of companies, when— (a) a group company ( company A ) originally acquires and holds the livestock; and (b) from the time it is acquired to the end of the income year, the livestock is held within the group by a company or companies that are resident in New Zealand; and (c) through transfers within the group, another group company ( company B ) holds the livestock at the end of the income year; and (d) company A and company B remain part of the group at the end of the income year; and (e) either— (i) the income years of company A and company B end on the same date; or (ii) they end on different dates, and the Commissioner has approved both dates as corresponding to the end of a business cycle and as necessary to avoid material distortion of net income that would occur if the income years ended on the same date. Choice of treatment (2) Company B may choose to value the livestock at the cost of the livestock to company A. When company stops being part of group (3) If the companies stop being part of the same wholly-owned group, company B is treated as disposing of and reacquiring the livestock for its market value at the time. If the market value of the livestock cannot be determined separately from other property, its market value at the time company B acquired it is treated as its value. Defined in this Act: business , Commissioner , company , income year , net income , resident in New Zealand , wholly-owned group of companies , Compare: 2004 No 35 s EC 5