BIM55425 - Farming: stock valuation: farm animals treated as trading stock

ICTA88/SCH5/PARA1 (1) provides that, except where they fall to be dealt with under the herd basis (see BIM55500 onwards), animals kept by a farmer for the purposes of his or her farming are to be treated as trading stock. Although most farm animals would probably fall to be so treated under normal commercial principles, this statutory direction puts the matter beyond doubt. The statutory provision does not however cover working animals (see BIM55440 regarding working horses) or animals kept wholly or mainly for public exhibition or for racing or other competitive purposes. The treatment of such animals should therefore follow normal principles.

Guidance on the valuation of thoroughbred horses is provided at BIM55701 - BIM55705. The deemed cost method is not appropriate to the valuation of thoroughbred horses.