VALUES OF STOCK

New Zealand Herald, Volume LXXV, Issue 23088, 13 July 1938, Page 14

VALUES OF STOCK

FARMERS' TAX RETURNS THE ECZEMA OUTBREAK EIGHTS UNDER THE ACT HARDSHIP PROVISIONS [by aELEOK APH —SPECIAL REPORTER] WELLINGTON, Tuesday Difficulties arising in the valuation for incoino tax purposes of stock aifected by facial eczema were the subject of a statement issued this evening by the Minister of Agriculture, the Hon. W. Leo Martin. He made it clear that existing legislation was sufficient to enable every case of hardship in the assessment of tax to be dealt with on its merits. The matter was raised with the Minister at the time of the outbreak of facial eczema in the Auckland Province earlier this year by Mr. A. Hayward, chairman of tho farmers' advisory committee. Depreciation Question "Mr. Hay ward pointed out that stock on hand at the end of the financial year had depreciated in value," tho Minister said, ""'and that this depreciation should be allowed as a setoff against tho income of that year. I conveyed these representations to the Minister of Finance, tho Hon. W. Nash, who has supplied me with a report on the subject trom tho Commissioner of Taxes." According to the report, tho Minister continued, tho position regarding values for livestock was governed by section 13 of the Land and Income Tax Act, 1929, which provided for tho computation of assessable income derived from dealing in livestock. Under tho terms of the Act a farmer who had adopted a standard value had tho absolute right to adopt the true value, but such a change in value had first to take effect at tho end and for the purposes of tho income year to which the change related. No Fictitious Profit Thus a farmer who had adopted a standard value in all returns up to and including tho income year ended March 31, 1937, or other balance date, and whose stock was affected, could, in rendering his return for tho j'ear ended March 31, 1938, or other balance date, show tho value of tho stock on hand at the beginning of tho year at the previous standard value and at tho end of the year at the true value. In tho adoption of that course there could be no question of fictitious profit, which could arise only if animals permanently depreciated in value wero brought in at tho end of tho year at tho original standard value. New Legislation Not Needed

Losses of stock by death prior to tho end of tho farmer's income year wero reflected in the stock returns and were automatically allowed for. If a farmer adopted a true value to suit his own convenience, tho usual procedure was to require him to keep to the true value in all subsequent returns. The present hardship provisions, according to the commissioner, would also meet the position of any farmer whose stock had been affected, if, when payment of income tax or employment tax was duo, he was able to establish a case for relief from paynient. Thero did not appear to bo any necessity for special legislation, as each case, of necessity, would have to bo taken on its merits.