In Parliament

The Chancellor was asked if rollover relief was available to farmers who received lump sum compensation for foot and mouth disease and wished to reinvest in further livestock. In reply Andrew Smith said that animals were not chargeable assets for capital gains tax purposes but were part of trading stock so any compensation would be on revenue rather than capital account and thus form part of the farmer's trading income. Rollover relief would not therefore apply.

Where the herd basis operated the profit from the disposal of production animals would be deferred until they were replaced and the profit would be exempt if they were not replaced. Special rules allowed profits on the disposal of other animals compulsorily slaughtered to be spread over three years.

Replying to a question concerning temporary rate reduction applications Dawn Primarolo said that approximately 23...