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We have a farming partnership that prepares accounts on a fiscal year basis. The herd basis is not presently in force; however during the year ended 5 April 2009 half of the herd was slaughtered on account of TB.
The DEFRA and NFU proceeds were received in the same year.
We have a fresh opportunity to elect for the herd basis as ITTOIA 2005 s 126(2) says that the year ended 5 April 2009 is deemed to be the first period of account in which the partnership has kept a production herd (see BIM55605).
It is clear that the opening mature stock is transferred to the herd account at book value at the start of the first relevant period of account. This ensures that there is no taxable ‘paper profit’ which is to be expected in the circumstances.
One...
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