See, I imagine all kinds of details in the book are probably true. Received wisdom about lying is to invent as little as possible -- the little details that really happen are more convincing, and you can be questioned about them without looking in any way suspicious because you're remembering, not inventing, just transposing stuff to a different time/place/person.
It's entirely possible, to my mind, that they had an elderly sheep that died, but the timing of the death being just before the bailiffs arrive, and after they've failed to find anywhere for her to go, and them both digging her a grave in the field etc etc sounds suspiciously schmaltzy. Smotyn the sheep does a lot of work at the start of the book in establishing them as good and caring people, who didn't sell her on for petfood, and evoking memories of their two student-aged children, who are largely absent from the entire narrative.
I've always found it deeply weird that her first mention of them is 'the children couldn't help'.