Taxation Determination TD 2017/7
Date of effect: 29 March 2017

What this ruling is about: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. 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, freshwater crayfish are 'trading stock' as defined in subsection 70-10(1) of the Income Tax Assessment Act 1997 (ITAA 1997) [1] because they are livestock. 2. You may use a reasonable estimate of the number of freshwater crayfish to value your trading stock on hand at the end of the financial year, based on: 3. The basis of estimating the closing number of freshwater crayfish is one that is most likely to reflect the quantity of freshwater crayfish you have on hand. The approach should not be changed unless you can demonstrate that another approach would be more accurate. Date of effect 4. This Determination applies to income years commencing both before and after its date of issue. This Determination will not apply to taxpayers to the extent that it conflicts with dispute settlement terms agreed to before the date of issue of this Determination (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). Commissioner of Taxation 29 March 2017




Appendix: Meaning of 'trading stock': 5. The term 'trading stock' includes 'live stock' at paragraph 70-10(1)(b) of the ITAA 1997. 6. 'Live stock' is defined in subsection 995-1(1) and excludes 'animals used as beasts of burden or working beasts in a business other than a primary production business'. This definition is essentially unchanged from the former definition of 'live stock' in subsection 6(1) of the Income Tax Assessment Act 1936. 7. In the context of the former definition, the High Court considers that, by inference, 'live stock' includes all animals used in a business of primary production. [2] Freshwater crayfish, being crustaceans, are animals. [3] 8. A 'primary production business' includes a business of 'maintaining animals for the purpose of selling them or their bodily produce (including natural increase)'. [4] 9. A business of keeping and raising freshwater crayfish for sale falls within the definition of 'primary production business'. 10. Accordingly, freshwater crayfish produced for sale are 'live stock' and fall within the definition of 'trading stock'. | Quantifying freshwater crayfish on hand: 11. We recognise that quantifying freshwater crayfish on hand at the end of the financial year is difficult because the population fluctuates. [5] 12. We will therefore accept the following industry-based methods of quantifying freshwater crayfish on hand at the end of a financial year as a reasonable basis to value trading stock for the purposes of section 70-35: 13. You must adopt the approach most likely to reflect the quantity of freshwater crayfish you have on hand. The approach should not be changed unless you can demonstrate that another approach would be more accurate. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). The dictionary also defines 'crustacean' as: The dictionary further defines 'arthropod' as: Not previously issued as a draft


Footnotes: a small lobster-like freshwater crustacean. | any arthropod of the class Crustacea, having a hard shell and usually aquatic. | an invertebrate animal of the phylum Arthropoda, with a segmented body, jointed limbs, and an external skeleton.


Previous rulings: IT 2667
Related rulings: TR 2006/10
Legislative references: ITAA 1997 ITAA 1997 70-10(1) ITAA 1997 Subdiv 70-C ITAA 1997 995-1(1) ITAA 1936 6(1)
Case references: Federal Commissioner of Taxation v. Wade (1951) 84 CLR 105 [1951] HCA 66 (1951) 25 ALJ 626 (1951) 9 ATD 337 [1951] ALR 962
Other references: The Australian Oxford Dictionary, 2004, 2nd edn, Oxford University Press, Melbourne