Farm capital gains

A husband and wife partnership operate a tenanted farm under an Agricultural Holdings Act tenancy together with some land that they own personally. One succession remains on the tenancy and the farmer’s son (not currently a partner) intends taking on the farm in the future.

My clients are looking at the possibility of providing a house for their son and may fund this by selling some of the owned land. The house will not be located on the farm but will be relatively close by.

If the land is sold a sizeable gain will arise and I am now looking at the capital gains tax position.

In the first instance this is the sale of a business asset rather than a part of a business and so will not qualify for entrepreneurs’ relief. However if the sale is related to the parents bringing their son into...