VALUES OF FARM STOCK: INCOME TAX QUESTION

Bay of Plenty Beacon, Volume 13, Issue 44, 21 January 1949, Page 5

VALUES OF FARM STOCK: INCOME TAX QUESTION

Present System To Stay, Says Mr Nash (Federated Farmers News Bulletin) Wellington, Jan. 20. He could hold out no immediate prospect of any alteration in the present system of treating farmers’ livestock as trading stock for the purpose of income tax assessment, said the Minister of Finance (Mr Nash) in reply to representations from Federated Farmers. The Federation had asked that legislation should be enacted to alter the existing system of taxing a farmer in cases where he sold his livestock at mai’ket values which were in excess of standard values. The principle involved was an important one, said Mr Nash, but he could see no practicable alternative to treating livestock as trading stock. While that was so regarded, the ordinary rules as to valuation and the inclusion as income of increases in value realised on sale had to be adhered to. It was difficult to find a method which would meet the objections of farmers and at the same time preserve equity among all classes of the community. Customs Overseas Federated Farmers have since pointed out that in Canada and the United Kingdom, farmers’ livestock are treated for taxation purposes as capital assets. In the United Kingdom, farmers have the option of treating their livestock for taxation purposes as capital assets or as trading stock, and the Federation feels that what is practicable and equitable there would be practicable and equitable in New Zealand. At present the New Zealand system operated harshly on the store stock breeding- farmer, the Federation claimed. He was a breeder rath?r than a trader in stock; his position was extremely difficult. The proposed amendment would not allow any type of farmer to avoid taxation, but would be more just and equitable.