^[6]>

“stock to which this section applies” means—

(a) all cattle forming part of the trading stock of the trade of farming, where such cattle are compulsorily disposed of on or after 6 April 1993, under any statute ^[7]>relating to the eradication or control of diseases in livestock^<[7], and for the purposes of this section all cattle shall be regarded as compulsorily disposed of where, in the case of any disease eradication scheme relating to the eradication or control of brucellosis in livestock, all eligible cattle for the purposes of any such scheme, together with such other cattle as are required to be disposed of, are disposed of, or

(b) animals and poultry of a kind specified in Parts I and II, respectively, of the First Schedule to the Diseases of Animals Act, 1966, forming part of the trading stock of the trade of farming, where all animals or poultry of the particular kind forming part of that trade of farming are disposed of on or after 6 December 2000, in such circumstances that compensation is paid by the Minister for Agriculture, Food and Rural Development in respect of that disposal.

^<[6]

^[3]>

(3A) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the chargeable period in which such discontinuation takes place in respect of the amount of the excess which would, but for such discontinuance, be treated by virtue of subsection (3) as arising in an accounting period or accounting periods ending after such discontinuance.

^<[3]

^[4]>

(4) Subject to subsection (4A), where, not later than the end of the period over which the excess is treated as arising under subsection (3), the person incurs or intends to incur expenditure on the replacement of stock to which this section applies in an amount not less than the relevant amount, then the person shall, in substitution for any deduction to which the person might otherwise be entitled under section 666 as a result of incurring an amount of expenditure equal to the relevant amount, be deemed to be entitled to a deduction under that section—

(a) where subsection (3)(a) applies, for each of the 4 immediately succeeding accounting periods referred to in that subsection, and

(b) where subsection (3)(b) applies, for the accounting period in which the excess arises and each of the 3 immediately succeeding accounting periods referred to in that subsection,

and the amount of that deduction shall be an amount equal to the amount treated as arising in each accounting period under subsection (3)(a) or (3)(b), as the case may be, and section 666 shall apply with any necessary modifications in order to give effect to this subsection.

(4A) Where it subsequently transpires that the expenditure actually incurred, on the replacement of stock to which this section applies, by the end of the period over which the excess is treated as arising under subsection (3), was less than the relevant amount, then—

(a) the aggregate deduction to which the person is deemed by subsection (4) to be entitled under section 666 in respect of the 4 accounting periods referred to in paragraph (a) or (b), as the case may be, of that subsection shall be reduced to an amount that bears the same proportion to that aggregate deduction as the expenditure actually incurred in those 4 accounting periods bears to the relevant amount, and

(b) the reduction to be made in accordance with paragraph (a) shall, as far as possible, be made in a later accounting period in priority to an earlier accounting period.

^<[4]

^[5]>

(6) Where—

(a) by virtue of the operation of section 65, the profits or gains of both the year of assessment 2001 and the year of assessment 2002 are computed on the basis of an accounting period of one year ending in the period from 1 January 2002 to 5 April 2002, and

(b) an instalment referred to in subsection (3) is treated as arising in that accounting period,

then, notwithstanding any other provision of the Tax Acts—

(i) an amount equal to 74 per cent of that instalment shall be taken to be part of the profits or gains of the trade of farming for the year of assessment 2001, and

(ii) an amount equal to 26 per cent of that instalment shall be taken to be part of the profits or gains of the trade of farming for the year of assessment 2002.

(7) Where, by virtue of subsection (4), a person is deemed to be entitled to a deduction under section 666 in respect of the accounting period referred to in subsection (6), then—

(a) 74 per cent of such deduction shall be granted for the year of assessment 2001, and

(b) 26 per cent of such deduction shall be granted for the year of assessment 2002.

^<[5]