Corporation Tax Act 2009 section 123

Five year gap in which no production herd kept

Section 123 deals with what happens when a farmer stops keeping a production herd of a particular class for at least five years and then starts keeping that class of herd again.

• If a farmer ceases to keep a production herd of a particular class for a continuous period of at least 5 years, the herd basis rules effectively reset
• Any previous herd basis election made for that class of herd ceases to have effect after the 5-year gap
• The accounting period in which the farmer starts keeping the herd again is treated as the very first period in which they keep a production herd of that class
• If the farmer wishes to use the herd basis for the new herd, a fresh election will need to be made