Annex 1: Minor changes in the law made by the Act: Change 35: Herd basis elections: date from which effective: section 124(7)
This change relates to the date from which a herd basis election is effective.
For farmers, except those trading in partnership, paragraph 2(4)(a) of Schedule 5 to ICTA refers to the election having effect for the qualifying year of assessment and all subsequent periods. For partnerships the rule in paragraph 2(4)(b) of Schedule 5 to ICTA is slightly different. The election has effect for the qualifying period of account.
As explained in Change 34 this Act merges the rules for making herd basis elections. This means that for all farmers the election will take effect by reference to periods of account.
This is a minor change in the law if “period” in the definition of “qualifying year of assessment” in paragraph 2(6) of Schedule 5 to ICTA means basis period not period of account. But in practice it is interpreted as meaning period of account.
This change is in the taxpayer’s favour in principle. But it is expected to have no practical effect as it is in line with current practice.