We have a farming client who has now entered into a rental agreement with a solar power generator(SPG). Under the terms of the agreement an annual rental payment of £10,000 will be paid to our client to allow the SGP to occupy the 7 acres of land on which solar panels have been erected. Additionally our client has received a payment of £20,000 for "decommissioning" at the end of the 20 year lease. The SPG will vacate the land at the end of the lease, leaving our client to restore the land to its former agricultural use, entailing inter alia the removal and disposal of the PV and peripheral equipment.
Views on the taxation consequences of this unusual arrangement please.