Taxes Consolidation Act 1997 section 668

Compulsory disposals of livestock

Section 668 provides for special tax treatment for farmers in respect of profits accruing as a result of the disposal of stock under statutory disease eradication measures.

• Farmers may elect to spread the profit on a compulsory disposal of livestock over four accounting periods, either the four periods after the disposal or the disposal period plus the next three periods.
• If the farming trade is permanently discontinued, any unspread profit is charged to tax under Schedule D Case IV in the period of discontinuance.
• Stock relief of 100 per cent is available in each year of the four-year spread period, provided the farmer reinvests (or intends to reinvest) the full compensation in replacement stock by the end of that period.
• If the actual reinvestment falls short of the compensation received, the aggregate stock relief is reduced proportionately, with the reduction applied to later periods first.