Part 2Trading income
Chapter 8Trade profits: herd basis rules
Introduction
111Election for application of herd basis rules
1
A person who keeps or has kept a production herd for the purposes of a trade may make an election under this Chapter (a “herd basis election”).
2
In calculating the profits of the trade, animals which are part of a production herd in relation to which a herd basis election has effect—
a
are not treated as trading stock (see section 30), but
b
are treated instead in accordance with sections 114 to 123 (“the herd basis rules”).
3
This Chapter is expressed in terms of farmers but applies to any person who keeps or has kept a production herd for the purposes of a trade, whether or not the trade is farming.
4
References in this Chapter to keeping a production herd are to keeping it for the purposes of the trade.