Section 120 — Corporation Tax Act 2009: Replacement of part sold begun within 5 years of sale

Replacement of part sold begun within 5 years of sale 120 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.