Part 3

Trading income
Chapter 8

Trade profits: herd basis rules

The herd basis rules

Addition of animals to herd
113
1
This section applies for the purpose of calculating the profits of the trade if an animal is added to the herd, unless it replaces another animal in the herd.
2
No deduction is allowed for the cost of the animal.
3
If, immediately before it was added to the herd, the animal was part of the farmer's trading stock, the balancing amount is brought into account as a receipt.
4
“The balancing amount” means—
a
in the case of an animal bred by the farmer, the cost of breeding the animal and rearing it to maturity, and
b
in any other case, the sum of the initial cost of acquiring the animal and the cost (if any) incurred by the farmer in rearing the animal to maturity.
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)