Section 114 | Replacement of animals in herd

(1)This section applies for the purpose of calculating the profits of the trade if—

(a)an animal (“the old animal”) is sold from the herd or otherwise ceases to be part of the herd, and

(b)it is replaced in the herd by another animal (“the new animal”).

(2)The sale proceeds (if any) of the old animal are brought into account as a receipt.

(3)But this needs to be read with—

(a)section 115 (amount of receipt if old animal slaughtered under disease control order),

(b)section 118 (acquisition of new herd begun within 5 years of sale), and

(c)section 120 (replacement of part sold begun within 5 years of sale).

(4)Except so far as otherwise allowable, a deduction is allowed under this section for the cost of the new animal.

(5)But if the new animal is of better quality than the old animal, the amount of the deduction must not exceed the amount that it would have been necessary to spend to replace the old animal with an animal of the same quality.