Bees are considered livestock, so as a beekeeper you need to assign a value to your hive at the beginning and end of each financial year.
Most businesses with trading livestock must calculate the difference between the opening value and the closing value of their trading livestock and include this amount as assessable income in their income tax return.
How to value bees
You can use a simplified practice of valuing a ‘live hive’ rather than accounting for the individual bees.
The three methods you can use to value a live hive are:
- market-selling value
- replacement value.
- To calculate the value of your live hive see PS LA 2008/4 (GA) Trading stock: valuing bees in honey businesses.
When the value of your closing stock is greater than the value of opening stock, you must include the difference in your assessable income.
For example, if a business opens the year with $10,000 of livestock and closes the year with $18,000 of livestock, they would have had an increase in $8,000 worth of livestock. The $8,000 is included in their assessable income for the year.
Simplified trading stock rules for small businesses
Small business entities can use the simplified trading stock rules if they carry on a business and have an aggregated turnover of less than $10 million.
Broadly, aggregated turnover is your annual turnover plus the annual turnovers of any entities you are connected to or affiliated with.
Under the simplified trading stock rules, you not have to account for changes in the value of your trading stock or do stocktakes for tax purposes if the difference between the value of your opening stock and a reasonable estimate of your closing stock is $5,000 or less.
- TD 2008/26 Income tax: are bees kept for use in a honey production business trading stock?
- PS LA 2008/4 (GA) Trading stock: valuing bees in honey businesses
- Information for primary producers
- Simplified trading stock rules