I propose to take Questions Nos. 106 and 108 together.
Capital Gains Tax, CGT, is a tax on a capital gain arising on the disposal of assets. A 20% rate of CGT applies on the gains arising on the disposal of assets, including farmland. It was announced in the 2003 budget that no rollover relief would be allowed for any purpose on gains arising from disposals on or after 4 December 2002. This relief was introduced when CGT rates were much higher than current levels. In effect, it was a deferral of tax to be paid, where the proceeds of disposal were re-invested into replacement assets. The taxation of these gains would take place following the eventual disposal of the new assets without their replacement.
The abolition of this relief was in accordance with the overall taxation policy of widening the tax base in order to keep direct tax rates low. Such reliefs and allowances made sense when CGT rates were 40% and above. As the Deputy may be aware, the rate was halved from 40% to 20% in budget 1998. Taxing capital gains when they are realised is the most logical time to do so, and this change brought CGT into line with other areas.
It is not the practice to comment in the lead up to the annual budget and Finance Bill on the intention or otherwise to make changes in taxation.