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

S112(3)(4) Income Tax (Trading and Other Income) Act 2005, S110(3)(4) Corporation Tax Act 2009

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. They are known in some parts of the country as `heafted' flocks. In the case of such flocks, immature animals are necessarily reared for replacements. These may be treated as forming part of the herd up to the number required to maintain the numbers in the flock and no more. 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 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, immature animals in such herds cannot be regarded as being within the production herd.

Any claim that the statutory provisions apply to animals other than hill sheep should be submitted (unless clearly inadmissible) to CTISA.