Stock on hand
You must value your livestock at the end of each income year as part of working out your net income from primary production.
You can choose to value livestock on hand at the end of the income year at cost, market selling value or replacement value. For certain horse breeding stock, an additional option is available, see Taxation Ruling TR 2008/2 Income tax: various income tax issues relating to the horse industry; including whether racing, training and breeding activities (carried out as stand-alone activities or in combination) amount to the carrying on of a business.
You may change the basis of valuation year by year and different valuation basis may be adopted for individual livestock. The value of your opening livestock on hand on 1 July 2025 should be the same as the value of your closing stock on 30 June 2024 that you used for your tax return 2023–24. That is, you must use the same valuation method at the beginning of the new income year as you used at the end of the previous income year.
Small business entities
You don't have to value each item of trading stock (including livestock) on hand at the end of 2024–25 or account for changes in the value of your trading stock for 2024–25, if:
- you are a small business entity for 2024–25
- you choose to access the simplified trading stock rules
- the difference between the value of all trading stock on hand at the start of 2024–25 and the value you reasonably estimate of all your trading stock on hand at the end of 2024–25 isn't more than $5,000.
However, if you prefer, you can still conduct a stocktake and account for changes in the value of trading stock for 2024–25 even if the difference isn't more than $5,000.
Oyster farmers
Oyster farmers must account for oysters on hand as trading stock. This includes oysters held on sticks or slats, in trays or harvested and held ready for sale.
For more information, see Oyster farmers calculating the value of trading stock.
Bees
Entities carrying on a business of beekeeping for the purpose of honey production must account for bees on hand as trading stock. You may be eligible to use a simplified practice of valuing a live hive rather than accounting for the individual bees.
Goods taken from stock for private use
If you take goods from stock for your own use, or for the use of your family members, you must account for the goods as if the stock had been disposed of at cost.
This includes the situation where a grazier slaughters livestock for personal consumption or for rations for employees.
For more information, see Tax Determination TD 2024/8 Income tax: value of goods taken from stock for private use for the 2024-25 income year.
Natural increase
The cost of an animal you hold as livestock that you acquire by natural increase is whichever of these you pick:
- actual cost of the animal
- cost prescribed by the Income Tax Assessment (1997 Act) Regulations 2021
- cattle, horses and deer $20
- pigs $12
- emus $8
- goats and sheep $4
- poultry 35c.
If your business involves breeding exotic animals (for example, ostriches or alpacas), contact us to confirm the appropriate cost.
For more information, see Primary production activities.
You must value a horse you acquire by natural increase and include it in livestock on hand at a cost not less than the insemination service fee attributable to acquiring the horse.
Continue to: Abnormal receipts
Return to: Depreciating assets and capital expenditure