Although all animals kept by a farmer for the purposes of farming, other than animals treated on the herd basis (see B5.150), are trading stock1 (except where profits are calculated on the cash basis for unincorporated businesses (see B2.111)2), this statutory direction does not apply to working animals, such as horses. Accordingly, horses working on a farm may be treated either as trading stock or as fixed assets, provided that the treatment is consistent. The cost of a home bred horse added to working horses treated as capital assets may be valued at 85% of open market
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