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HMRC internal manual

Business Income Manual

Farming: stock valuation: livestock subsidies: particular animals

In the case of the Scottish Beef Scheme or other schemes, where a livestock subsidy is payable in respect of individually identified live animals, its effect may need to be taken into account when using the deemed cost method of valuation described in Helpsheet 232 (see BIM55410).

If the subsidy has been taken into account in full in a particular period then there is no effect on deemed cost valuations. Where a receipt has not been taken into account in a particular period but:

  • the subsidy has been applied for, and
  • that application had a material effect on the market value of the animal,

then the subsidy should be taken into account as a supplement to the market value when deemed cost is computed.

Subsidies which have been applied for but not recognised as income in the period concerned should also be taken into account in arriving at net realisable value for stock valuation purposes.