Income Tax (Trading and Other Income) Act 2005 section 123

Section 122: sale for reasons outside farmer's control

Section 123 limits the taxable receipt when a farmer is compelled to sell part of a herd for reasons beyond the farmer's control and the replacement animal is of worse quality than the one sold.

• Where a farmer is forced to sell part of a herd for reasons wholly outside the farmer's control and the replacement animal is of worse quality, the amount taxed as a receipt is capped at the "equivalent amount" for the new animal
• If the replacement animal came from the farmer's own trading stock and was bred by the farmer, the equivalent amount is the cost of breeding and rearing the animal to maturity
• If the replacement animal came from the farmer's own trading stock but was not bred by the farmer, the equivalent amount is the initial acquisition cost plus any costs of rearing the animal to maturity
• In all other cases, the equivalent amount is simply the purchase cost of the new animal