INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 2 - Income  

Subdivision B - Trading Stock  

SECTION 34   COST PRICE OF NATURAL INCREASE  

34(1A)   [Application ceases]  

This section does not apply to animals acquired by natural increase in the 1997-98 year of income or a later year of income.

Note:

Section 70-55 (Working out the cost of natural increase of live stock) of the Income Tax Assessment Act 1997 applies to live stock acquired by natural increase in those years of income.

34(1)   [Cost price]  

If a minimum cost price is prescribed in respect of live stock, the cost price per head of natural increase of that class of live stock of a taxpayer is:


(a) where the cost price of natural increase of that class has previously been taken into account under this Act by the taxpayer:


(i) the greater of:

(A) the cost price per head at which natural increase of that class was last taken into account; and

(B) the minimum cost price prescribed in respect of live stock of that class;

(ii) if the taxpayer, with the leave of the Commissioner, selects another cost price that is not less than the minimum cost price prescribed in respect of live stock of that class - that other cost price; or

(iii) if:

(A) the taxpayer elects that this subparagraph apply in relation to live stock of that class; and

(B) the actual cost price per head of natural increase of that class is less than the minimum cost price prescribed in respect of live stock of that class;
the actual cost price; and


(b) where the cost price of natural increase of that class has not been previously taken into account under this Act by the taxpayer:


(i) the cost price selected by the taxpayer, not being less than the minimum cost price prescribed in respect of live stock of that class; or

(ii) if:

(A) the taxpayer elects that this subparagraph apply in relation to live stock of that class; and

(B) the actual cost price per head of natural increase of that class is less than the minimum cost price prescribed in respect of live stock of that class;
the actual cost price.

34(2)   [No selection by taxpayer]  

For the purposes of paragraph (1)(b), where:


(a) a taxpayer does not select, as mentioned in subparagraph (1)(b)(i), within the time prescribed; and


(b) subparagraph (1)(b)(ii) does not apply;

the taxpayer shall be taken to have selected, as the cost price, the prescribed minimum cost price.

34(2A)   [Time of election]  

An election by a taxpayer under subparagraph (1)(a)(iii) or (b)(ii) must be made on or before the date of lodgment of the return of income of the taxpayer for the year of income to which the election relates, or before such later date as the Commissioner allows.

34(2B)   [Actual cost price if no minimum cost prescribed]  

If no minimum cost price is prescribed in respect of live stock of a class, the cost price per head of natural increase of that class of live stock of a taxpayer is the actual cost price per head of natural increase of that class.

34(3)   [Service fee incurred after 19 August 1986]  

Where:


(a) after 19 August 1986, a taxpayer has incurred a service fee the whole or a part (which whole or part is in this subsection referred to as the ``attributable amount'' ) of which is attributable to the acquisition of a horse by the taxpayer by natural increase; and


(b) the attributable amount exceeds the amount that, but for this subsection, would be the cost price of the horse,

the cost price of the horse shall be the attributable amount.

34(4)   [Commissioner's discretion re service fees]  

For the purposes of this section, where:


(a) under an agreement:


(i) a taxpayer incurs a loss or outgoing; and

(ii) a female horse is inseminated; and


(b) as a result of the insemination, the taxpayer acquires a horse by natural increase,

the Commissioner may, to such an extent as the Commissioner considers reasonable:


(c) in a case to which paragraph (d) does not apply - treat the loss or outgoing as a service fee incurred by the taxpayer and as attributable to that acquisition; or


(d) where the amount of the loss or outgoing incurred under the agreement would have been the same irrespective of the number of inseminations performed on the horse under the agreement - treat so much of the loss or outgoing as, in the Commissioner's opinion, relates to inseminations performed on the horse under the agreement as a service fee incurred by the taxpayer and as attributable to that acquisition.

34(5)   [Definitions]  

In this section:

"agreement"
means an agreement, arrangement or understanding, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings;

"insemination"
includes artificial insemination;

"service fee"
means a fee for the insemination of a female horse.


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