BIM55580 - Farming: herd basis: `heafted' flocks of hill sheep

As an exception to the general rule (see BIM55575), immature animals may be treated as forming part of the herd where, owing to the nature of the land on which the herd or flock is kept, animals leaving the herd or flock can only be replaced by animals bred and reared on that land. In practice this normally only applies to certain flocks of hill sheep kept under natural conditions on mountain, hill or heathland and known in some parts of the country as `heafted' flocks. In the case of such flocks, immature animals necessarily reared for replacements, up to the number required to maintain the numbers in the flock and no more, may be treated as forming part of the herd. Immature animals in excess of the number required for replacements are to be treated as trading stock in the normal way.

Apart from hill sheep, it is a common farming practice, particularly with pedigree herds, to keep as far as possible a self-contained herd in order to maintain or improve the quality achieved and to reduce the risk of introducing diseases and deficiencies from outside. Unless, exceptionally, this practice arises solely from the nature of the land, such herds cannot be regarded as coming within ICTA88/SCH5/PARA8 (2).

Any claim that the provisions of paragraph 8(2) apply to animals other than hill sheep should be submitted (unless clearly inadmissible) to Business Tax (Technical).