Taxation Determination TD 2008/26
Date of effect: 19 November 2008





Appendix: 3. Section 70-10 states that trading stock includes: 4. The use of the word 'includes' in the definition of trading stock in section 70-10 signifies that a thing may be trading stock for the purposes of the provision if it meets the requirements in paragraphs 70-10(a) or 70-10(b) or is otherwise trading stock within the ordinary meaning of that term. [2] 5. The term 'live stock' is defined in subsection 995-1(1) to 'not include animals used as beasts of burden or working beasts in a *business other than a *primary production business'. [3] The High Court in Federal Commissioner of Taxation v. Wade [4] considered this definition of 'live stock' when it was then found in subsection 6(1) of the Income Tax Assessment Act 1936. Dixon and Fullagar JJ stated that the definition, by inference, makes it clear that all animals used in a primary production business are included as live stock. [5] 6. Bees, being insects, are animals. [6] Paragraph (b) of the definition of 'primary production business' in subsection 995-1(1) includes as a primary production business a business of 'maintaining animals for the purpose of selling them or their bodily produce (including natural increase)'. Honey is the bodily produce of bees. [7] A business of keeping bees for the production and sale of honey is a 'primary production business' as defined in subsection 995-1(1) and the bees kept for use in that honey production business are live stock. 7. As bees kept for use in a honey production business are live stock, they are trading stock as defined in section 70-10. [8] Previous draft Previously released in draft form as TD 2007/D7


A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | Ruling: 1. Yes, bees kept for use in a honey production business are trading stock as defined in section 70-10 of the Income Tax Assessment Act 1997 (ITAA 1997) [1] because they are livestock. | Date of effect: 2. This Determination applies to years of income commencing both before and after its date of issue. However, the Determination will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). | Commissioner of Taxation 19 November 2008 | Footnotes: (1)(a) ... a stinging hymenopterous insect of the genus Apis, which collects nectar and pollen, produces wax and honey, and lives in large communities. | (b) a related insect of the superfamily Apoidea, either social or solitary; (2) any insect of similar type. | (1)(a) a six-legged arthropod of the class Insecta, frequently having one or two pairs of wings; | (b) (loosely) any small invertebrate animal with several pairs of legs.


Related rulings: TR 2006/10
Legislative references: ITAA 1936 6(1) ITAA 1997 ITAA 1997 70-10 ITAA 1997 70-10(a) ITAA 1997 70-10(b) ITAA 1997 995-1 ITAA 1997 995-1(1) TAA 1953
Case references: Federal Commissioner of Taxation v. St Hubert's Island Pty Ltd (1978) 138 CLR 210 78 ATC 4104 (1978) 8 ATR 452
Subject references: agriculture honey bees livestock industry livestock valuation trading stock primary production
Other references: Law Administration Practice Statement PS LA 2008/4 (GA) The Australian Oxford Dictionary, 1999, Oxford University Press, Melbourne About the Honey Industry http://www.honeybee.org.au