C1Part 3Trading income

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Chapter 8Trade profits: herd basis rules

The herd basis rules

113Addition of animals to herd

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.