(1) The profits or gains arising in any chargeable period to the owner or part-owner of a stallion from the sale of services of mares by the stallion or rights to such services shall be chargeable to income tax or corporation tax, as the case may be, in accordance with subsection (2).
(a) In a case in which the owner or part-owner of a stallion carries on in the chargeable period referred to in subsection (1) the trade of farming in respect of which the owner or part-owner is within the charge to tax under Case I of Schedule D, the profits or gains referred to in subsection (1) and any amount chargeable under subsection (3)(c) of section 669I shall be chargeable under that Case of that Schedule as part of that trade.
(b) In a case, other than one referred to in paragraph (a), the profits or gains referred to in subsection (1) and any amount chargeable under subsection (3)(c) of section 669I shall be chargeable under Case IV of Schedule D.