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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
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Farming: herd basis: who can elect

S111 Income Tax (Trading and Other Income) Act 2005, S109 Corporation Tax Act 2009

Any person who keeps a production herd (see BIM55570) can elect for the herd basis, subject to the statutory time limits (see BIM55600 - BIM55605). For this purpose, the farmer may be a sole trader, a partnership or a limited company. Where farming is carried on in partnership, the election is made at the partnership level. If there is a change in the membership of the partnership, a fresh election is required (see BIM55610).

The legislation, although expressed in terms of farmers, applies to any person who keeps a production herd for the purposes of a trade even though that trade may not be farming. Accordingly, the herd basis also applies, with necessary adaptations, to animal or fish breeding.