Commentary on Sections Overview Overview Section 124: Herd basis elections
510.This section sets out the rules for the making of herd basis elections. It is based on paragraph 2 of Schedule 5 to ICTA.
511.The section does not specify that the election is to be made to “the inspector”. Section 878(4) draws attention to the rules in TMA, which apply for the purposes of this Act. Those rules require elections to be made to “an officer of the Board”.
512.Subsection (2) sets out the time limit for making the election. It merges the rules for partnerships and all other taxpayers with one exception. See Change 34. The exception is the extension to the time limit given to taxpayers other than partnerships by paragraph 2(5) of Schedule 5 to ICTA. This extension is preserved in subsection (2)(b).
513.Subsection (3) defines “the first relevant period of account”. See Change 34 in Annex 1.
514.Subsection (4) expands on subsection (1), which provides that an election must specify the class of production herd to which it relates. This means separate elections must be made for each class of production herd and that an election may not relate to more than one class of production herd. Separate elections may be made for different classes.
515.Subsection (6) identifies the production herds to which the election applies.
516.Subsection (7) identifies the periods of account to which the election applies. See Change 35 in Annex 1. Section 129 allows earlier years to be re-opened to give effect to an election.
517.Subsection (8) deals with the case in which the farmer is a firm and there is a change in the partners in the firm. Paragraph 2 of Schedule 5 to ICTA refers to “the farmer making the election”. If the farming trade is carried on in partnership, the “farmer” means the firm. If there is a change in the members of a firm, the question arises whether there is a new “farmer”. Subsection (8) makes clear that there is.