½Û×ÓÊÓƵ

The herd basis is not automatic. A farmer must elect for it¹ within a stipulated period after they begin to keep the herd in question. The election is not available to unincorporated farmers who calculate their profit on the cash basis (see B2.111)².

For income tax purposes, to determine the period within which an election can be made it is necessary to determine:

1. Ìý

   (a)ÌýÌýÌýÌý the first period of account in which the farmer kept a production herd of the class to which the election relates

2. Ìý

   (b)ÌýÌýÌýÌý the tax year in which that period of account ended

The election must be made on or before the first anniversary of the filing date for that tax year, ie 31 January two years after the end of that tax year³.

Example

J has been an arable farmer for many years and makes up accounts to 31 December. In March 2023 J acquires a dairy herd of cattle. This acquisition is in the accounts year ending on 31 December 2023,