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EC 4B: Compulsory use of herd scheme method for associated persons
or “Rules for selling livestock to connected persons using the herd scheme”
You could also call this:

“Rules for valuing and timing livestock transfers between farmers”

When you transfer specified livestock under section EC 4B, this section explains how to value the livestock and when the transfer is considered to happen.

If you and the person you’re transferring to have the same tax year, the transfer is treated as if you sold the livestock and they bought it. The value used is the herd scheme value at the end of your income year.

Sometimes, your tax year might be different from the other person’s tax year. If they get the livestock in an earlier tax year than when you give it up, the transfer is treated as a sale and purchase using the herd scheme value at the start of your income year.

If they get the livestock in a later tax year than when you give it up, the transfer is treated as a sale and purchase using the herd scheme value at the end of your income year. For the person receiving the livestock, they’re treated as if they owned and valued the livestock under the herd scheme on the last day of their income year before they actually got it. This helps them work out their opening value under section EC 16.

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Next up: EC 5: Transfer of livestock because of self-assessed adverse event

or “Rules for helping farmers by giving or selling animals cheaply during tough times”
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Part E Timing and quantifying rules
Valuation of livestock

EC 4CValue and timing of transfers

  1. This section applies to a transfer (the transfer) of specified livestock that section EC 4B applies to.

  2. If the transfer occurs in the same tax year for both the transferor and transferee, then the transfer is treated as a disposal and acquisition at the value of the relevant livestock under the herd scheme at the end of the transferor's corresponding income year.

  3. If the transfer occurs in different tax years for the transferor and transferee, then subsection (4) or (5) applies.

  4. If the transferee acquires the relevant livestock in a tax year earlier than the tax year in which the transferor disposes of it, then the transfer is treated as a disposal and acquisition at the value of the relevant livestock under the herd scheme at the beginning of the transferor's corresponding income year.

  5. If the transferee acquires the relevant livestock in a tax year (the later tax year) later than the tax year in which the transferor disposes of it, then—

  6. the transfer is treated as a disposal and acquisition at the value of the relevant livestock under the herd scheme at the end of the transferor's corresponding income year:
    1. for the purposes of the transferee's opening value under section EC 16, the transferee is treated as owning and valuing the relevant livestock under the herd scheme on the last day of the transferee's income year corresponding to the tax year before the later tax year.

      Notes
      • Section EC 4C: inserted (with effect on 28 March 2012), on , by section 39 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).