What you earn from a cull may be transferred from the tax year of the cull. You can do this by spreading this income evenly over the next 6 tax years.
Eligibility for spreading income
To use this option, you'll need to meet the following requirements.
- Biosecurity New Zealand has required a cull of stock affected by Mycoplasma bovis (Mbovis).
- Your business is a dairy or beef-breeding operation
- You've used the national standard cost (NSC) or self-assessed cost (SAC) scheme to value the female breeding stock that were culled.
If you're not sure about these schemes, make sure you talk to a tax agent.
Requirements for culled breeding stocks
If you culled a breeding stock because of Mbovis, it must be made up mainly of mixed-aged cows. This applies to any class, or combination of classes, of breeding stock. You must also make sure the:
- stock is mostly replaced by purchasing equivalent breeding stock by the end of the tax year following the cull year
- replacement stock continues to be valued using, as relevant, NSC or the SAC schemes.
You can spread income from a cull when the cull year falls between the 2017-2018 and 2027-2028 tax years.
Send a notice for spreading income from culls
To spread income from culls, you'll need to let us know. Send a notice to us if you're:
- deciding to spread the income you earned from culling a herd
- sending your notice to us before the due date.
Due date for sending the notice to us
If you decide to spread income from a cull, send us the notice for culls in the:
- 2021 and earlier tax years by your due date for 2021 income tax returns
- 2022 and future tax years by your due date for that year's income tax return.