HC Deb 02 November 1983 vol 47 cc376-7W
Mr. Latham

asked the Chancellor of the Exchequer on what authority the capital taxes office indicated that horse owners and breeders will not be permitted 50 per cent. agricultural relief on capital transfer tax and also, in certain circumstances, not be permitted 50 per cent. business relief; and if he will instruct the office to reverse this decision.

Mr. Moore

Under the provisions of the capital transfer tax, agricultural relief is given for agricultural property occupied for agricultural purposes. Business relief is given if the business is carried on for gain. Whether any particular property qualifies under these provisions is a matter of the proper interpretation of the law in relation to the facts of the particular case. If the taxpayer does not accept the view of the Inland Revenue he may appeal.

Mr. Latham

asked the Chancellor of the Exchequer (1) whether in the light of the effect in the United Kingdom bloodstock industry of the present value added tax position, he will take early action to bring the United Kingdom practice into line with that of France and Ireland;

(2) what progress is being made in harmonising value added tax on bloodstock within the European Community.

Mr. Hayhoe

The VAT treatment of bloodstock in the European Community is governed by the provisions of the sixth directive on the harmonisation of VAT. The position in the United Kingdom conforms to the provisions of the directive and the system in France has recently been brought into line. There is a temporary derogation from the directive which permits Ireland to continue to exempt bloodstock, but it does not permit the introduction of new exemptions. The EC Commission has prepared a report on the temporary derogations but has not yet made proposals for ending any of them. The concern felt by the United Kingdom bloodstock industry will be borne in mind in any discussions on the temporary derogations.

Mr. Latham

asked the Chancellor of the Exchequer why, in his discussions with the bloodstock industry, he has proposed a herd basis of assessment to bloodstock breeders for stock relief, rather than a stock in trade basis; and if he will make a statement.

Mr. Moore

I shall let my hon. Friend have a reply as soon as possible.