This clause legislates Extra Statutory Concession
B37, which extends the special rules for taxing production animals
("the herd basis") to animals held on a shared basis,
and confirms that capital allowances are not due on production
animals. These changes are deemed always to have had effect.
DETAILS OF THE CLAUSE
Subsection (1) inserts a new subsection
(2) into section 82 Capital Allowances Act 1990.
New section 82(2) confirms that expenditure on
production animals or shares in production animals to which the
rules in Schedule 5 Income and Corporation Taxes Act 1998 on the
treatment of farm animals for the purposes of Case 1 of Schedule
D apply does not qualify for machinery and plant capital allowances.
Subsection (2) legislates Extra Statutory
Concession B37. It provides for the rules in Schedule 5 Income
and Corporation Taxes Act 1998 on the treatment of farm animals
for the purposes of Case 1 of Schedule D to apply to a share in
a production animal in the same way as they apply to a whole animal.
Schedule 5 provides for the keeping of production
animals, such as cows or sheep, to be taxed on a trading basis,
using either of two alternative methods. These rules are written
in terms of animals kept either singly or in flocks or herds.
They have also been applied by extra-statutory concession to shares
in production animals. This covers for instance share farming,
where a flock or herd is farmed by a group of farmers on a shared
basis. Subsection (2) puts this practice on a firm legal footing.
Subsection (3) provides for these
changes, which are being made to confirm existing practice and
understanding of the law, always to have had effect.