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Readers' Forum
Replies to Queries — 4
Milk and eggs
We act for a family farming partnership (mum and dad, son and wife) who have now ceased milking, but also run a poultry enterprise. The building that housed the cattle and parlour will be renovated at a cost in excess of £100,00 for use as a retail outlet and will be let at a rent of £35,000 per annum.
Our specific queries are as follows.
Readers' Forum
Replies to Queries — 4
Milk and eggs
We act for a family farming partnership (mum and dad, son and wife) who have now ceased milking, but also run a poultry enterprise. The building that housed the cattle and parlour will be renovated at a cost in excess of £100,00 for use as a retail outlet and will be let at a rent of £35,000 per annum.
Our specific queries are as follows.
First, would the partnership have to 'opt to tax' the building in order to recover the VAT on the inputs (and hence charge VAT on the rents) and, if so, would this be part of its normal VAT registration?
Secondly, if the farm is owned by son and wife, could they opt to tax separately and have the business run separately from the farm, thus removing the asset from potential inheritance tax on mum and dad?
Thirdly, are there any consequences for agricultural property relief if the diversification takes place, as there will still be a substantial poultry enterprise? Presumably, the letting portion of the business would not qualify for inheritance tax relief?
Readers' views are welcomed.
(Query T16,519)
