Income and Corporation Taxes Act 1988

6 (1) Where the whole or a substantial part of a production herd kept by a farmer for the purposes of his farming is slaughtered by the order of any Ministry, government department or local or public authority under the law relating to the diseases of animals in such circumstances that compensation is payable in respect of it, an election for the herd basis thereupon made by the farmer in relation to that herd and any other production herds of the same class so kept by him shall, subject to sub-paragraph (2) below, be valid notwithstanding that it is not made within the time required by paragraph 2(3) above.

[F1 (2) An election for the herd basis made by virtue of sub-paragraph (1) above shall only be valid if made—

(a) in the case of an election by a person chargeable to income tax, not later than twelve months from the 31st January next following the qualifying year of assessment;

(b) in the case of an election on behalf of persons in partnership, not later than twelve months from the 31st January next following the year of assessment in which the qualifying period of account ends; and

(c) in the case of an election by a person chargeable to corporation tax, not later than two years from the end of the qualifying accounting period.

(3) An election for the herd basis made by virtue of sub-paragraph (1) above shall, notwithstanding paragraph 2(4) above, have effect—

(a) in a case falling within sub-paragraph (2)(a) above, for the qualifying year of assessment and all subsequent years;

(b) in a case falling within sub-paragraph (2)(b) above, for the qualifying period of account and all subsequent periods of account; and

(c) in a case falling within sub-paragraph (2)(c) above, for the qualifying accounting period and all subsequent accounting periods.

(4) In this paragraph—

• “period of account”, in relation to persons in partnership, means any period for which accounts are drawn up;

• “qualifying accounting period”, in relation to a person chargeable to corporation tax, means the first accounting period in which the compensation is relevant;

• “qualifying period of account”, in relation to persons in partnership, means the first period of account in which the compensation is relevant;

• “qualifying year of assessment”, in relation to a person chargeable to income tax, means the first year of assessment for which the amount of [F2 profits] or losses in respect of his farming falls to be computed for tax purposes by reference to the facts of a period in which the compensation is relevant.]

(5) For the purposes of this paragraph, compensation shall be deemed to be relevant in any period if, but only if, it falls (or would but for an election under this paragraph fall) to be taken into account as a trading receipt in computing the [F2 profits] or losses of that or an earlier period.

Textual Amendments

F1 Sch. 5 para. 6(2)-(4) substituted (with effect in accordance with s. 199(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 19 para. 43(4)

F2 Words in Sch. 5 para. 6(4)(5) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1