While the silly season* for tax news in the UK sees the Daily Mail flounder for new angles on the injustice of Inheritance Tax, New Zealand has been following the issue of taxing Agriculture for its contribution to it's nation's greenhouse gases.

A general election looms in New Zealand and the ruling Labour Party has delayed its greenhouse gas tax emissions created by farm animals proposals until the end of 2025.

The country's five million people are outnumbered by 10 million cattle and 26 million sheep (all Provisional figures,) the result is that its Agricultural sector as a whole contributes nearly half of New Zealand's gross greenhouse gas emissions with up to 30% coming as methane, from both ends of their animals.

This 'wind and burp' tax, as it's known, has drawn Farmers from around the country to protest in Auckland, Wellington and Christchurch. Oblivious to Britain's IHT Agricultural Property Relief issue, the NZ farming sector argues, 'Without farmers, you'll be Hungry, Naked and Sober' and they would Leave the sector in droves.

With arguments from the Green Party that agriculture could draw on the nation's Emissions Trading Scheme's financial resources, but doesn't pay into it, and what started as a small levy on solid dairy products has evolved into 'biogenic methane emissions'.

As things stand, by the end of 2025, New Zealand's farmers will be taxed on the flatulence of their Livestock, with sheep levied at 9c each and cows at up to 72c under the government's proposals. Deer and goat farmers will also be taxed.

* Silly season: the traditional name for the summer period when there is no major news.

Useful guides on this topic

Farming: Tax Overview
What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies? What expenses can farmers claim for tax purposes? Are there special tax and accounting rules for farmers? What are the VAT rules for farmers?

Herd basis: Farming
The 'herd basis' recognises, for tax purposes, the economic nature of animals held for production as capital assets, rather than as trading stock. This can be of benefit to some farmers and result in tax savings.

Farming: Capital allowances
What types of expenditure may qualify for capital allowances in farming businesses? What farming-specific points need to be considered?

Flat rate scheme: Farmers
What is the agricultural flat rate scheme? Who can use it? What are the conditions? What is the benefit? What about non-farming income?


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