Farm animals have the characteristics of machines in that they convert grass into milk or wool. If a farmer who does not calculate their profits on the cash basis elects (see B5.152) for the herd basis to apply to a production herd (see below), the animals in that herd form part of their fixed capital for tax purposes in the same way as plant and machinery; this does not mean that the herd can qualify for capital allowances1. It cannot apply to working horses or working dogs; or to animals kept for public exhibition or racing or other competitive purposes. It cannot apply to 'flying flocks', that is, sheep or cattle held for resale, even though these beasts
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Web page updated on 17 Mar 2025 14:48