Part 2Trading income
Chapter 8Trade profits: herd basis rules
Elections
124Herd basis elections
1
A herd basis election must specify the class of production herd to which it relates.
2
A herd basis election must be made—
a
on or before the first anniversary of the normal self-assessment filing date for the tax year in which the first relevant period of account ends, or
b
if that is the tax year in which the farmer starts to carry on the trade and the farmer is not a firm, on or before the second anniversary of the normal self-assessment filing date for that tax year.
3
“The first relevant period of account” means the first period of account in which the farmer making the election keeps a production herd of the class to which the election relates (but see subsection (8)).
4
A herd basis election cannot relate to more than one class of production herd, but separate elections may be made for different classes.
5
A herd basis election is irrevocable.
6
A herd basis election has effect in relation to all production herds of the class to which it relates, including any which the farmer—
a
has ceased to keep before making the election, or
b
first keeps after making the election.
7
A herd basis election has effect for every period of account in which the farmer—
a
carries on the trade, and
b
keeps a production herd of the class to which the election relates.
8
If the farmer is a firm and there is a change in the persons who are partners in the firm—
a
any herd basis election made by the old firm ceases to have effect, and
b
in relation to the new firm, “the first relevant period of account” means the first period of account in which the new firm keeps a production herd of the class to which the election relates.
125Five year gap in which no production herd kept
1
This section applies if a farmer—
a
keeps a production herd of a particular class, and
b
ceases altogether to keep herds of that class for a period of at least 5 years.
2
If the farmer keeps a production herd of that class after the end of that period—
a
the period of account in which the farmer starts to keep the herd is treated as the first period of account in which the farmer keeps a production herd of that class, and
b
any herd basis election previously made by the farmer in relation to production herds of that class ceases to have effect.
126Slaughter under disease control order
1
This section applies if—
a
the whole or a substantial part of a production herd kept by a farmer is slaughtered under a disease control order, and
b
the circumstances of the slaughter are such that compensation is payable in respect of the animals slaughtered.
2
The farmer may make a herd basis election in respect of the class of production herd involved in the slaughter as if the period of account —
a
in which the compensation falls to be brought into account in calculating the profits of the trade, or
b
in which it would (but for the election) fall to be so brought into account,
were the first period of account in which the farmer keeps a production herd of that class.
3
An election made as a result of this section has effect for that period of account and every subsequent period of account in which the farmer—
a
carries on the trade, and
b
keeps a production herd of the class to which the election relates.
4
In this section “disease control order” means an order made under the law relating to the diseases of animals by—
a
central government,
b
a devolved authority,
c
a local authority, or
d
another public authority.