Section 120 | Replacement of part sold begun within 5 years of sale

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

(a)either all at once or over a period not longer than 12 months, a substantial part of the herd is sold, and

(b)the farmer acquires or starts to acquire animals to replace the part sold within 5 years of the sale.

(2)Section 114 (replacement of animals in herd) applies so far as the animals included in the part sold are replaced (but see section 121 (sale for reasons outside farmer's control)).

(3)The sale proceeds of an animal included in the part sold are not brought into account as a receipt until the animal that replaces it in the herd is acquired.

(4)If some of the animals included in the part sold are not replaced—

(a)a profit arising from their sale is not brought into account as a receipt, and

(b)no deduction is allowed for a loss arising from their sale.