Income Tax (Trading and Other Income) Act 2005 section 129

Further assessment etc. if herd basis rules apply

Section 129 deals with the situation where the herd basis rules come into effect after a tax assessment for a particular year has already been finalised, and sets out how adjustments are to be made.

• Where the herd basis rules apply to the calculation of profits for a tax year after the assessment for that year has become final and conclusive, any necessary tax assessment or repayment must be made to give effect to those rules.
• A repayment of tax will only be made if the taxpayer submits a formal claim for it.
• This provision ensures that a herd basis election is not rendered ineffective simply because the relevant tax assessment was finalised before the election took effect.
• The section applies to income tax assessments and covers both additional assessments (where more tax is due) and repayments (where tax has been overpaid).