Corporation Tax Act 2009 section 117

Sale of whole or substantial part of herd

Section 117 sets out the tax treatment when a farmer sells all or a substantial part of a herd within a 12-month period under the herd basis rules.

• Where the whole herd or a substantial part is sold within 12 months, any profit from the sale is excluded from trading receipts
• Equally, no deduction is allowed for any loss arising from such a sale
• This treatment does not apply if the farmer begins acquiring a replacement herd or replacing the part sold within 5 years of the sale (sections 118 and 120)
• Even where section 118 would otherwise apply, there are circumstances under section 118(5) where the profit and loss exclusion rules of this section will still take effect