Livestock tax changes

Press, 22 June 1984, Page 14

Livestock tax changes

PA Wellington The Government intends amending the Income Tax Act to ensure that no tax liability arises from a transfer of livestock between spouses under a matrimonial agreement, the Minister in charge of the Inland Revenue Department, Mr Falloon, has said. The change was being made “in line with the original intention of matrimonial property amendments made to the act last year,” said Mr Falloon.

The change would depend on the outcome of the Gen-

eral Election, however, as the Labour Party opposed the amendments last year, he said.

Mr Falloon said it had become apparent that in some cases the transferee in a matrimonial transfer was required, under present legislation, to adopt a higher standard value than was being used by the transferor. The effect of this was to create a book profit which was assessed for income tax in the hands of the transferor. The 1973 amendments intended to recognise the pro-

perty rights of a spouse and not to increase any taxpayer’s tax burden, Mr Falloon said. “In line with this, the legislation will be amended to allow the transferee to adopt the same standard value for livestock transferred in a matrimonial agreement as was adopted by the transferor.”

To ensure that all matrimonial transfers were covered by the amendment, it would apply retrospectively from July 28,1983, he said.