Taxation Ruling
IT 227
Forced disposal of livestock
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FOI status:
May be releasedFOI number: I 1102629PREAMBLE
The question has been raised whether sections 36AA and 36AAA of the Income Tax Assessment Act apply to the proceeds arising from the sale of sheep affected with footrot disease.
RULING
2. Legislation in New South Wales relating to the control of disease in livestock does not provide for the compulsory destruction of footrot affected sheep. A grazier who finds footrot in his sheep generally has two courses open to him. One is to incur the expense of treating the disease; the other is to sell the sheep to an abattoir for immediate slaughter. Any decision to dispose of infected animals is made solely on the judgement of the owner. In these circumstances neither section 36AA nor section 36AAA would have any application to the proceeds of sale.
3. The situation is different in Victoria and South Australia. There is provision in the relevant legislation in both of these States for the compulsory destruction of footrot affected sheep. Section 33(3) of the Stock Disease Act of Victoria enables the Minister to require the owner of sheep within the footrot control area to sell for the purpose of slaughter any sheep in quarantine by reason of footrot or any sheep which in the opinion of the Chief Inspector have been exposed to infection with footrot. Similarly, under Regulation 34A of the Stock Diseases Act of South Australia, the Minister, if satisfied that any sheep have been quarantined by reason of footrot, or have, in the opinion of the Chief Inspector, been exposed to infection with footrot, may require the owner thereof to sell such sheep for the purposes of slaughter.
4. Both section 33(3) of the Stock Diseases Act of Victoria and Regulation 34A of the Stock Diseases Act of South Australia are accepted as laws for or in relation to the compulsory destruction of livestock. Proceeds from sales of sheep for slaughter in terms of either provision would attract the operatiton of section 36AA or 36AAA. If the relevant legislation in the remaining States or Territories is to the same effect as that in Victoria and South Australia the same conclusion will follow.
COMMISSIONER OF TAXATION
13 July 1981