BIM55115 - Farming in tax law: all farming by same person treated as one trade
S9(2) Income Tax (Trading and Other Income) Act 2005, S36(2) Corporation Tax Act 2009
»Ê¹ÚÌåÓýapp legislation requires that all the farming carried on in the United Kingdom by a particular person, whether individual, company, partnership or other body of persons, should be treated as a single trade. But, where an individual carries on farming activities both as a sole trader and as a partner, or as a member of two different partnerships, the separate activities are treated as separate trades. »Ê¹ÚÌåÓýapp profits of a person who carries on farming activities, in the same capacity, at more than one farm should be computed in a single sum.
A person who:
- removes from one farm to another without an interval, or
- gives up a portion of his land, or
- takes over additional land (whether or not he or she succeeds to the trade of his predecessor on that land)
is therefore chargeable on the basis of a continuing trade notwithstanding the change (see Bispham v Eardiston Farming Co (1919) Ltd [1962] 40TC322).
Where there is an interval between the discontinuance at one farm and commencement at another, the farming should be treated as discontinued and a new trade as having commenced only where the facts support the conclusion that there was a permanent discontinuance of the original trade (see BIM80500 onwards).