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Capital herd

I,m looking for information on how to capitalise cattle for a farmer who is breeding Aberdeen Angus cattle. How and who chooses which cattle would be suitable for transfer and are they transferred at their current value. Do we need permission from HMRC before proceeding with this?

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Not exactly...

The herd basis is broadly compatible with applying the renewals basis in FRS 15.

Are you sure they're a fixed asset and not stock?  What happens to them once they've been bred?  Do they go to Tescos with the horses?

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By k whyte
25th Jan 2013 11:35

some of cows have been bred on the farm and matured to breeding stock so I guess this would be allowable to transfer them?

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I'm no great expert on the subject

But I believe that as long as their purpose is production (milk/young) then they can go in the production herd.

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I just wanted to add...

... that if you do cattleise them, then you'll need to keep a cattle list.

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By mhtax
26th Jan 2013 18:03

Too late?

When did the farmer begin to breed these cattle?

An election has to be made within 2 years of the cattle being used for this purpose and if you already have home bred matured stock in the herd you may well have gone past the deadline.

If not, you send an election to HMRC stating the date the election is effective from and the class of herd involved. All costs of acquiring/raising the herd are disallowed from the p&l as a receipt in that year so if costs of acquisition are high there may not be any great benefit on using herd basis. Home reared stock can be introduced to the herd on a deemed cost basis when they reach qualifying status.

I would recommend talking to a local accountant experienced in these decisions for advice as to pro's and cons

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