Section EC 41 — Income Tax Act 2007: Reduction: bloodstock not previously used for breeding in New Zealand other than as shuttle stallions

EC 41 Reduction: bloodstock not previously used for breeding in New Zealand other than as shuttle stallions Bloodstock to which this section applies (1) This section applies to bloodstock that— (a) was not used for breeding in New Zealand before 16 December 1991; and (b) before a person ( person A ) acquired it, was not used for breeding in New Zealand by any other person. Further bloodstock to which this section applies (1B) This section also applies to bloodstock that, before person A acquired it, was used by another person for breeding in New Zealand if— (a) the other person transferred the bloodstock to person A under a matrimonial agreement to which section FB 18 (Bloodstock) applies: (b) the other person was a company in the same wholly-owned group as person A at the time person A acquired the bloodstock from the other person: (c) the bloodstock is a stallion that, for each year in which the stallion was used for breeding in New Zealand before being acquired by person A, was— (i) owned by a non-resident; and (ii) removed from New Zealand after the breeding season; and (iii) not subject to a reduction under this section. Stallion (2) For the purposes of sections EC 39 and EC 40 , the reduction applying to the value of a stallion is 50% of the cost price of the stallion unless person A chooses to value the stallion by the reducing value method. Stallion valued by reducing value method (3) When person A chooses to value the stallion by the reducing value method, the reduction applying to the value of the stallion is 75% of its cost price in the first income year and 75% of its opening value in each later income year. Person A must give notice to the Commissioner of their election in their return of income for the first income year. Broodmare when first used on or after 1 April 2001 (4) For the purposes of sections EC 39 and EC 40 , the reduction applying to the value of a broodmare to which section EC 39(2) applies is calculated using the formula— 1.25 × cost price of broodmare 9 − age of broodmare. Definition of item in formula (5) In the formula, age of broodmare is— (a) 8 years of age; or (b) the actual age in years, if the broodmare is 7 years of age or less at the end of the income year. Relationship with section EZ 5 (6) This section is overridden by section EZ 5 (Reduction: bloodstock not previously used for breeding in New Zealand: pre-1 August 2006). Defined in this Act: bloodstock , broodmare , Commissioner , company , cost price , income year , matrimonial agreement , New Zealand , notice , return of income , stallion , wholly-owned group , year , Compare: 2004 No 35 s EC 41 Section EC 41 heading: amended, on 1 April 2008, by section 354(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EC 41(1)(b): substituted, on 1 April 2008, by section 354(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EC 41(1B) heading: inserted, on 1 April 2008, by section 354(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EC 41(1B): inserted, on 1 April 2008, by section 354(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).