§ 4. Mr. Chris Mullin (Sunderland, South)What plans he has to review the exemption for farmers from capital gains tax on agricultural land sold for development; and if he will make a statement. [72416]
§ The Paymaster General (Dawn Primarolo)There is no exemption for farmers from capital gains tax on agricultural land sold for development.
§ Mr. MullinI thank my hon. Friend for that reply and for the letter that she sent me, which arrived this morning, but I am not at all convinced. This looks like a scam, and one that benefits speculators rather than farmers. It also seems to be utterly at odds with our policy of discouraging development of green-field sites. Will she have another look at that measure?
§ Dawn PrimaroloI am delighted that my hon. Friend is at least receiving my letters, even if I am chided a little for their timing. On his serious point, he believes, to use his own words, that there is a scam in respect of capital gains roll-over relief. I have told him before that we have no evidence of that, and that it is not possible for the situation that he describes to occur; but, given his insistence, and if he has information that we, as the tax authorities, do not have, I am happy to meet him to pursue this issue.
§ Mr. William Ross (East Londonderry)Will the Minister take it from me that the real problem for farmers 1201 in recent years has not been exemptions, or anything else of the kind, but the impossibly low incomes that they currently enjoy?
§ Dawn PrimaroloWith regard to capital gains tax and the impact on farmers when they pay it, the legislation makes clear what happens. I assume that the hon. Gentleman welcomes the capital gains tax reforms undertaken last year by the Government to assist entrepreneurs and to make the system simpler.
§ Mr. Robert Maclennan (Caithness, Sutherland and Easter Ross)Does the Minister recognise, however, that, because of the collapse in agricultural incomes, which are charted by the Government's own figures, it would be wholly inappropriate to pursue environmental ends—which can be better achieved by planning regulation—by tinkering with the tax system, depriving those farmers who might have legitimately sold land for development, with all the necessary approvals?
§ Dawn PrimaroloThe capital gains tax regulations are quite clear, as is their impact on the issue that the right hon. Gentleman describes. I shall take his further comments about capital gains tax as a late Budget submission.
§ Mr. Christopher Gill (Ludlow)While considering the question of farmers' taxation, will the Minister consider a question of which she has already been given notice? Will she make it possible for farmers who trade in their private capacity, and not as limited companies, to enjoy the benefits in respect of offsetting losses against profits that they would enjoy if they were subject to corporation tax?
§ Dawn PrimaroloI say again that the way in which the capital gains tax system impinges on farmers is clear. I am sure that my right hon. Friend the Chancellor has heard the comments about future reform.