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Farming fluctuations
KEY POINTS
- Five-year averaging is introduced from 2016-17.
- A question over loss relief in the extended period.
- Interaction of averaging time limits and the loss claim deadline.
- Will tax planning benefits be reduced or negated in loss situations?
- Difficult choices when filing a return.
From 6 April 2016 farmers have had the option to average their taxable profits over two or five years – an extension to ITTOIA 2005 Pt 2 ch 16. The clear intention was to offer greater flexibility to farmers’ fluctuating profits and to recognise that volatility can occur over more than two years.
Initially the changes appeared attractive (and they are) but there is some confusion over what to do with losses being carried in the newly extended averaging period – in other...
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