§ 82. Mr. G. Williams
asked the Chancellor of the Exchequer to what extent, under his regulations, compensation paid to farmers who are forced to slaughter their stock owing to foot-and-mouth disease is subject to any form of taxation; and how it is calculated.
§ Mr. R. A. Butler
Where animals treated for tax purposes as trading stock have to be slaughtered the compensation represents a revenue receipt and as such is liable to tax. Where, however, a production herd is dealt with on the "herd basis" in accordance with an election under Section 473 and the Twentieth Schedule, Income Tax Act, 1952, compensation would normally be brought in as a receipt for tax purposes not at the time of payment, but as and when new animals were acquired in replacement.