A farming client has received £50000 for loss of farming rights as compensation. Does this qualify for business asset taper relief?
Ashley Jones
Replies (3)
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Precision is the name of the game
Please do not take this as a lecture or criticism, Ashley, but as an effort to help you and others who may read this and submit queries to this forum. Yes, tax advisers have to be somewhat pedantic-sorry- but it is vital that they receive the salient facts of a case and thus the wording of a question should be carefully thought over and woolly language eschewed. You kicked off by referring to " loss of farming rights" which was puzzling. Now the receipt has really been properly described: it seems the client had an agricultural tenancy or lease which, on receipt of a sweetener from landlord, he surrendered. I believe this is indeed a CGT matter and do not see why BATR isn't claimable-- after all, the asset involved has certainly been used in a trade.
Definitely CGT ??
I ask this because , as the Courts have decided, some compensation payments for loss of trade are classifiable as revenue , not capital. It is possible that BATR is in the frame but can we know a bit more before answering?
What proportion of his business has the farmer lost? Who was the payer of the £50000? How did the farmer gain entitlement to the money-- an Act of Parliament/ EU directive/ compulsory purchase, or what?
Can we hear from you, Ashley?