are not treated as trading stock (see section 50), but

are treated instead in accordance with sections 112 to 121 (“the herd basis rules”).

“animal” means any animal or other living creature,

“herd” includes a flock and any other collection of animals (however named), and

“production herd” means, in relation to a farmer, a herd of animals of the same species (irrespective of breed) kept by the farmer wholly or mainly for the products obtainable from the living animal which the animals produce for the farmer to sell.

the young of the animal, or

any other product obtainable from the animal without slaughtering it.

the nature of the land on which the herd is kept means that animals which die or cease to be part of the herd can be replaced only by animals bred and reared on the land,

the immature animals in question are bred in the herd and are maintained in the herd for the purpose of replacing other animals, and

it is necessary to maintain the immature animals for that purpose.

in relation to animals kept singly as it applies in relation to herds, and

in relation to shares in animals as it applies in relation to animals themselves.

the animals kept in both herds are of the same species (irrespective of breed), and

the products produced for the farmer to sell (for which the herds are wholly or mainly kept) are of the same kinds in both herds.

money received from an insurer because of the animal’s death or destruction,

compensation money received because of the animal’s death or destruction, and

the sale proceeds of the animal’s carcass or any part of its carcass.

in the case of laying birds, when they first lay, and

in any other case, when they produce their first young.

in the case of an animal bred by the farmer, the cost of breeding the animal and rearing it to maturity, and

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.

an animal (“the old animal”) is sold from the herd or otherwise ceases to be part of the herd, and

it is replaced in the herd by another animal (“the new animal”).

section 115 (amount of receipt if old animal slaughtered under disease control order),

section 118 (acquisition of new herd begun within 5 years of sale), and

section 120 (replacement of part sold begun within 5 years of sale).

the old animal was slaughtered under a disease control order, and

the new animal is of worse quality than the old animal,

central government,

a devolved authority,

a local authority, or

another public authority.

in the case of an animal bred by the farmer, the cost of breeding the animal and rearing it to maturity, and

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.

it is replaced in the herd by another animal (see section 114), or

it is sold as part of the sale of the whole or a substantial part of the herd that takes place all at once or over a period not longer than 12 months (see section 117).

in the case of an animal bred by the farmer, the cost of breeding the animal and rearing it to maturity,

in the case of an animal acquired by the farmer for valuable consideration, the sum of the initial cost to the farmer of acquiring the animal and the cost (if any) incurred by the farmer in rearing the animal to maturity, and

in the case of an animal acquired by the farmer but not for valuable consideration, the sum of the market value of the animal when acquired and the cost (if any) incurred by the farmer in rearing the animal to maturity.

section 118 applies (acquisition of new herd begun within 5 years of sale), or

section 120 applies (replacement of part sold begun within 5 years of sale),

either all at once or over a period not longer than 12 months, the herd (“the old herd”) is sold, and

the farmer acquires or starts to acquire another production herd of the same class (“the new herd”) within 5 years of the sale.

the number of animals in the old herd, or

if smaller, the number of animals in the new herd,

sold from the old herd, and

replaced in that herd by another animal (“the new animal”),

the number of animals in the new herd is smaller than the number of animals in the old herd, and

the difference is not substantial,

section 117 (sale of whole or substantial part of herd where replacement not begun within 5 years), or

section 120 (sale of substantial part of herd where replacement begun within 5 years),

if the difference between the number of animals in the new herd and the number of animals in the old herd is equal to 20% or more of the number of animals in the old herd, the difference is substantial, but

a lesser percentage than 20% is capable of being a substantial difference depending on the circumstances of the case concerned.

the farmer was compelled to sell the old herd for reasons wholly outside the farmer’s control, and

an animal (“the new animal”) that is treated as a result of section 118(2) as if it replaced an animal sold (“the old animal”) is of worse quality than the old animal,

in the case of an animal bred by the farmer, the cost of breeding the animal and rearing it to maturity, and

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.

either all at once or over a period not longer than 12 months, a substantial part of the herd is sold, and

the farmer acquires or starts to acquire animals to replace the part sold within 5 years of the sale.

a profit arising from their sale is not brought into account as a receipt, and

no deduction is allowed for a loss arising from their sale.

the farmer was compelled to sell the part of the herd for reasons wholly outside the farmer’s control, and

an animal (“the new animal”) that replaces an animal sold (“the old animal”) is of worse quality than the old animal,

in the case of an animal bred by the farmer, the cost of breeding the animal and rearing it to maturity, and

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.

not later than two years after the end of the first relevant accounting period (if the farmer is not a firm), or

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 (if the farmer is a firm).

“the first relevant accounting period” means the first accounting period in which the farmer making the election keeps a production herd of the class to which the election relates, and

“the first relevant period of account” means the first period of account in which the firm making the election keeps a production herd of the class to which the election relates (but see subsection (8)).

has ceased to keep before making the election, or

first keeps after making the election.

for every accounting period in which the farmer carries on the trade and keeps a production herd of the class to which the election relates (if the farmer is not a firm), or

for every period of account in which the farmer carries on the trade and keeps a production herd of the class to which the election relates (if the farmer is a firm).

any herd basis election made by the old firm ceases to have effect, and

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.

keeps a production herd of a particular class, and

ceases altogether to keep herds of that class for a period of at least 5 years.

the accounting period or (as the case may be) period of account in which the farmer starts to keep the herd is treated as the first accounting period or period of account in which the farmer keeps a production herd of that class, and

any herd basis election previously made by the farmer in relation to production herds of that class ceases to have effect.

the whole or a substantial part of a production herd kept by a farmer is slaughtered under a disease control order, and

the circumstances of the slaughter are such that compensation is payable in respect of the animals slaughtered.

in which the compensation falls to be brought into account in calculating the profits of the trade, or

in which it would (but for the election) fall to be so brought into account,

carries on the trade, and

keeps a production herd of the class to which the election relates.

central government,

a devolved authority,

a local authority, or

another public authority.

a person carrying on a trade (the “transferor”) transfers the whole or part of a production herd to another person (the “transferee”),

the transfer is not by way of sale or is by way of sale but for a price other than that which the animals sold would have fetched if sold in the open market, and

the control condition or herd basis benefit condition is met.

the transferor is a body of persons over which the transferee has control,

the transferee is a body of persons over which the transferor has control, or

both the transferor and transferee are bodies of persons and another person has control over both of them.

the transferor or transferee (or both) might (but for this section) have been expected to obtain a herd basis benefit as a result of the transfer or the transactions of which the transfer is one, and

the herd basis benefit is the sole or main benefit, or one of the main benefits, that the person in question might have been expected to obtain.

the obtaining of a right to make a herd basis election,

the herd basis rules applying or not applying, or

the herd basis rules having a greater or lesser effect.

the trade carried on by the transferor, and

any trade carried on by the transferee,

the animals kept for the purposes of the trade, and

the products of those animals,