Corporation Tax Act 2009 section 113

Addition of animals to herd

Section 113 sets out the tax treatment when an animal is added to a herd (as opposed to replacing an existing animal), preventing a deduction for the cost and requiring a balancing receipt where the animal was previously trading stock.

• This section applies when an animal is added to the herd, but not when it replaces another animal already in the herd (replacements are dealt with separately).
• No deduction is allowed for the cost of the animal being added to the herd.
• If the animal was part of the farmer's trading stock immediately before being added to the herd, a balancing amount must be brought into account as a trading receipt.
• The balancing amount is the cost of breeding and rearing to maturity (for animals bred by the farmer), or the initial acquisition cost plus any rearing costs to maturity (for purchased animals).