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Safe to graze?
KEY POINTS
- Statutory meaning of farming.
- The tribunal decided the land was occupied and husbanded by the taxpayer.
- The case helps to explain when grazing is a trading activity.
- Review agreements to ensure the landowner is the occupier and farmer.
The uncertainty as to whether a landowner is a farmer or a landlord for tax purposes shows no sign of abating with several recent cases on the commerciality of trading for loss offsets for farmers.
There has also been a useful decision – John Carlisle Allen (TC5100) – by the First-tier Tribunal which has helped to clarify the capital gains tax position on grass lettings and what constitutes trading or investment activities by the landowner. This can be relevant when there are significant rises in the value of land owned.
Although Allen related to a conacre arrangement in...
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