IHTM24036 - Agricultural property: Farmhouses

A residence must be either a 바카라 사이트˜cottage바카라 사이트™(IHTM24034) or 바카라 사이트™farmhouse바카라 사이트™ to come within the definition of 바카라 사이트˜agricultural property바카라 사이트™ in s115(2) IHTA.

A number of decisions have impacted on our view of what a -바카라 사이트˜바카라 사이트œfarmhouse바카라 사이트™ for the purposes of s115(2) is. Among the most important are:-

CIR v John M Whiteford and Son [1962] TR 157, in which it was stated that 바카라 사이트™a farmhouse is the place from which the farming operations are conducted바카라 사이트™

Rosser v IRC [2003] WTLR 1057, in which the Special Commissioner concluded that 바카라 사이트™it must be a dwelling for the farmer from which the farm is managed.바카라 사이트™

Lloyds TSB Banking v Peter Twiddy (Inland Revenue Capital Taxes) [DET/47/2004], in which it is stated 바카라 사이트™a farmhouse is the chief dwelling-house attached to a farm, the house in which the farmer of the land lives. There is, we think, no dispute about the definition when it is expressed in this way. The question is: who is the farmer of the land for the purpose of the definition in section 115(2)? In our view it is the person who lives in the farmhouse in order to farm the land comprised in the farm and who farms the land on a day to day basis바카라 사이트™ These statements lead to the conclusion that the occupant of a 바카라 사이트™farmhouse바카라 사이트™ must be a farmer. In other words, the person farming the land on a day to day basis. Whether a person is actually a 바카라 사이트˜farmer바카라 사이트™ of the land바카라 사이트™ will depend on all the facts of a particular case. So, a person with overall control of an agricultural business is not necessarily a 바카라 사이트˜farmer바카라 사이트™. The key factor is to identify if the occupant of the house has a significant role in the management, or actual operations, of the farming activity being carried out on the land involved. Conversely, it is not necessarily the case that a 바카라 사이트˜farmer바카라 사이트™ of land is a person whose principal occupation consists of farming the land.

The test is therefore essentially a functional one. As the Special Commissioner in Arnander and others (executors of McKenna, deceased) v Revenue and Customs Commissioners [2006] STC (SCD) 800 pointed out, 바카라 사이트˜the proper criterion is the purpose of the occupation바카라 사이트™. Since in that case the day to day farming was undertaken solely by contractors and a land agent was responsible for the management of the land, the deceased바카라 사이트™s residence was not a 바카라 사이트™farmhouse바카라 사이트™.

So, you will need to investigate in detail exactly what the occupier of the residence was doing in the way of agricultural activity in the relevant period before the deceased바카라 사이트™s death, to be able to determine whether their residence could properly be called a 바카라 사이트˜farmhouse바카라 사이트™. You should be particularly careful in cases where the farmer had retired and let their land on grazing agreements.

However, a temporary cessation of activity (for example, due to ill health) will not, in itself, prevent a residence being a 바카라 사이트˜farmhouse바카라 사이트™ if, on the precise circumstances of the case, it can properly be considered as functionally remaining attached to the farm, along the lines described above.

For a house to qualify for agricultural relief as a farmhouse it must also satisfy two conditions. It must

  • be agricultural property, (IHTM24030) and
  • have been occupied (IHTM24070) for the purposes of agriculture (IHTM24060) for the requisite period.

Both tests can be contentious. The ownership (IHTM24101) test may also need to be satisfied.