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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Farming: herd basis: shares in animals

S112(7)(b) Income Tax (Trading and Other Income) Act 2005, S110(7)(b) Corporation Tax Act 2009

The herd basis extends to shares in animals as they apply to animals. The rule applies both to shares in single production animals used by a farmer for the purposes of his herd, and to shares in animals forming part of a herd.

In practice, the most common use of this rule is likely to be where there is a jointly owned herd under a share farming agreement (see BIM55640).