| News
Tax tribunal: Grazing
NFU livestock chair
agreement owners must speaks out over livestock
farm for Business Relief worrying
Landowners who let land on a grazing agreement must
play an active role if they are to secure valuable tax reliefs,
following the ruling of a Tax Tribunal in Northern Ireland.
lthough case law
has long indicated
that landowners
must physically
manage the land
to qualify for
business tax relief, there is now a
clear First Tier Tribunal decision on
Capital Gains Tax. “This new
decision adds further weight and
clarification to the previous case
law,” says Jeremy Moody,
Secretary and Adviser at the
Central Association of Agricultural
Valuers (CAAV). “Although the
case revolves around a conacre
(seasonal grazing) agreement in
Northern Ireland, the ruling is
extremely pertinent to landowners
with grazing or cropping
agreements across the UK.”
A
“This new decision adds further
weight and clarification to the
previous case law”
Central to the Tribunal’s
decision in Allen v HMRC were the
actions of the landowner and the
grazier, not just the terms of the
agreement. In this case, the
landowner, John Allen, let 10 acres
of pasture to a neighbour for
seasonal grazing and silage from
March to November. However, he
also used the land as lairage for
animals sold in the market yearround and grazed it over the
winter. Importantly, Mr Allen also
supplied fertiliser for the tenant to
apply when needed, and engaged
a contractor to cut the weeds and
hedges.
“HMRC asserted that the grazier
had sole occupation of the land,
saying that if the grazier was in
occupation the owner could not
be,” says Mr Moody. “However,
the Tribunal rejected that on the
evidence before it. This case
turned on its own facts: Had Mr
Allen not shown that he both
occupied and undertook
responsibility for husbandry of the
land he would not have won this
relief.”
Although the case related to
Business Asset Taper Relief from
Capital Gains Tax (CGT) – which
was abolished in 2008 – the
decision is relevant to current
business reliefs from CGT such as
Entrepreneurs’ Relief and Rollover
Relief.
It is therefore relevant to any
landowner with land let on a
grazing or cropping agreement.
“Those who wish to be treated as
farmers for tax purposes must
meet the legal tests for that
status,” says Mr Moody. “It is not
the label on the agreement that
matters but the actual terms
agreed and what is done.”
In addition, the Tribunal rejected
the claim that the activity was an
investment. “Even though the land
had some development potential it
was being occupied for the
purposes of husbandry and
managed on a commercial - if
modest - basis,” says Mr Moody.
“This latest decision shows what
an owner of a grass let has to do
to qualify for tax relief.”
06 | Farming Monthly | June 2016
NFU livestock board chairman Charles Sercombe is to tell
farmers and members of the public that we must do more
to prevent cases of livestock worrying, and calls upon
police forces to investigate incidents and prosecute those
that act irresponsibly.
peaking at the
Sheepwatch UK
event in
Loughborough
recently, Charles
Sercombe will give
some key recommendations to the
farming community how they can
ensure reductions in incidences of
livestock worrying.
Mr Sercombe said: “Livestock
worrying has a devastating impact
on animal welfare and the farm
businesses. We need to
continually reiterate to the public
as part of our Love Your
Countryside campaign there is the
ever increasing need for vigilance
and take responsibility for their
dogs to prevent straying and to
keep them under control when
walking near livestock.
“What I will be saying to farmers
is that we need to be very mindful
of how difficult it is to pursue a
criminal case when these incidents
occur as gathering evidence is
notoriously difficult. However, I
would by no means say in some
cases this isn’t necessary. All too
often we hear about repeat cases
of worrying where dog owners
allow their pet to roam free around
livestock – let’s be clear this is
wholly unacceptable and these
cases must be addressed by the
authorities.
“We would urge farmers to
speak to their local police force if
S
they are encountering problems
and to find out what can be done
to prevent cases of livestock
worrying. Farmers should also
explore with their local police how
they gather evidence and only in
the last resort should farmers
considered shooting the dog.”
“We would urge farmers to
speak to their local police force
if they are encountering
problems and to find out what
can be done to prevent cases of
livestock worrying”
Given the amount of public
interest and the increase in cases
of livestock worrying that have
occurred recently, the NFU has
worked hard to raise the profile
amongst farmers and promote
responsible dog ownership in an
attempt to reduce these incidents.
“This year has seen the launch
of new dog signs to remind the
public to keep their dogs on a lead
and there is a business guide
which details to farmers what
options they have when an
incident occurs. We hope these,
along with the other initiatives, like
the event this week will decrease
this growing problem on livestock
farms.”
www.farmingmonthly.co.uk