farmhouse

farmhouse

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what are the rules for claiming the expenses of the farmhouse - do you have to be actively engaged in farming or does the letting of land for farming enable some relief ?
nick farrow

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By nick farrow
25th Sep 2007 11:57

many thanks Michael
this reference to the HMRC manual is just what I need to explode a clients mistaken understanding that the mere fact of living in a farmhouse afforded her some relief

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By michaelblake
24th Sep 2007 17:42

See BIM 55250
The only expenses that can be claimed as a deduction from the rents due from letting the farmland are those that are incurred to earn the rents. It is difficult to see what farmhouse expenses would relate to the letting of the land if the land is let but the farmhouse is not.

If both the farmhouse and land are used for the purposes of a trade there is guidance at BIM 55250, reproduced below

BIM55250 Farming: expenses of farmhouse
A farmhouse normally fulfils a dual role being primarily the private residence of the farmer and his or her family and secondarily the centre of business operations on the farm. The farmer's occupation of the farmhouse partly as a residence means that the provisions of ICTA1988, s. 74 (a), (b) and (c), apply. Only the proportion of the expenses such as heating and lighting, repairs, maintenance and insurance and, in the case of a tenant farmer, rent (see BIM55255), which is attributable to the business use of a farmhouse should be allowed as a deduction in computing farming profits.
You may see cases where, one third of the farmhouse expenses is claimed as if this were a standard allowable proportion. There is no statutory authority for this fraction and the extent of any business use will always be a question of fact and degree in any particular case.

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