BIM55720 - Farming: stud farms:
studs farms on the herd basis
The herd basis applies to horses as it does to other production
animals but, because of the economics of the industry, elections
are unusual. Any election for the herd basis in a case in which the
progeny is not wholly or mainly for sale (transfers from stud to
training not being regarded for this purpose as sales) should be
submitted to CT&VAT (Technical)
Where an election for the herd basis is accepted, the
guidance at BIM55500 onwards applies. The following points should
be noted -
- All immature stock should continue to be
dealt with as stock in trade. Transfers of immature stock from or
to training should be dealt with in accordance with
BIM55715.
- Where exceptionally a mature animal is put
into training, adjustments should be made as though at the time of
transfer it had been sold from the herd at its then market value
(see
BIM55535 and
BIM55550).
- If a mature animal is returned to stud
after racing, its cost price for the purposes of the herd basis
should be taken to be its market value at the time of return (see
BIM55530 and BIM55535).
See
BIM55705 as regards open market
valuations.
