BIM55065 says that we can treat short term grazing licences as continuing the same trade of farming. So does it then follow for capital gains that we can claim ER on the sale of the farm land?
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To qualify for ER
There must be a disposal of assets used for the purposes of a trade at the time that that trade ceased or there must be a disposal of a trade or part of a trade.
A trade for this purpose is defined in TCGA 1992, section 288 as having the same meaning that it has for the Income Taxes Acts, and in section 169S as including a profession or vocation.
The meaning of trade for the purposes of the Income Tax Acts is given in ITA 2007, section 989; a trade or a venture in the nature of a trade.
BIM55065 deals with the deeming provision in ITTOIA 2005, section 9, that says that all farming and market gardening activities carried on by a person shall be treated for income tax purposes as the carrying on of a trade.
BIM55065 confirms that short-term grazing constitutes farming and so is part of the deemed farming trade.
The meaning of trade is unaltered by section 9 though.
So I would say that, even if your grazing land were sold within circumstances that would otherwise put it within my first paragraph above, it is not likely to qualify for ER.
Trading
The trade was the original farming. I would consider it unlikely that the subsequent rental would be considered trading, but the continued fertilization might assist.
How long ago did the actual farming cease?
CLA
I would suggest you contact the Countryside Landowners Association as their Tax department will be able to look at your grazing agreements to see if they qualify. If you continued to qualify for the Single payment it is a possibility
Hang on
I thought we were talking about entrepreneur's relief, not agricultural property relief and business property relief, that were the subject of Julie Butler's article?
Those turn on whether the income from those activities falls to be treated as farming income under ITTOIA 2005, section 9, which I cannot see applies for the purposes of entrepreneurs' relief.
EDIT: I see that brief reference is made to the land "may" qualify for ER. Whilst I must bow to Lulie Butler's greater experience on farming matters, that view does differ from my interpretation.
Practical oporation
The lack of written agreements will not necessarily matter if facts support the principle.
You need to demonstrate that they were growing and selling a crop of grass.
Is there is a flock of sheep coming in for a couple of months and then off again with no expectation on either side that the grazing is the grazers.
Letting a lady in the village graze her ponies all year round is unlikely to succeed for a variety of reasons.
@Portia
Thanks - just a pity I can't spell!!
You can't edit a title.
Managing the land apart from fertiliser is the reponsibility for fencing/hedges, mowing paths and keeping the weeds down in general.
Very like the agreements farmers entered into to qualify for setaside etc