Income Tax (Trading and Other Income) Act 2005 section 117

Amount of receipt if old animal slaughtered under disease control order

Section 117 limits the taxable receipt under the herd basis rules when an animal slaughtered under a disease control order is replaced by one of worse quality.

• Where an animal is compulsorily slaughtered under a disease control order and replaced with one of worse quality, the taxable receipt under section 116 is capped at the "equivalent amount" for the new animal.
• A disease control order is any order made under animal disease legislation by central government, a devolved authority, a local authority or another public authority.
• If the replacement animal was already part of the farmer's trading stock, the equivalent amount is either the cost of breeding and rearing (if farmer-bred) or the acquisition cost plus any rearing costs (if purchased).
• If the replacement animal was not part of the farmer's trading stock, the equivalent amount is simply its purchase cost.