Commentary

B5.101 What is 'farming' and 'market gardening'

Business tax
Business tax | Commentary

B5.101 What is 'farming' and 'market gardening'

Business tax | Commentary

Part B5     Specific trades and activities

Contents of Part B5

B5.1     Farming, market gardening and forestry

B5.2     Transactions in land

B5.3     Intellectual property

B5.4     Leases

B5.5     Sound recordings and film trades

B5.6     Other specific trades

B5.7     Offshore funds

Division B5.1     Farming, market gardening and forestry

For updates affecting this Division please see Part B0 Updates

Farming, market gardening and forestry—general

B5.101 What is 'farming' and 'market gardening'

The terms 'farming' and 'market gardening' are both statutorily defined by reference to the occupation of land. The definitions are relevant for a number of special statutory provisions, the most important of which are as follows:

  1.  

    (a)     if they are carried on in the UK, both farming and market gardening are treated as carrying on a trade, whether or not the land is managed on a commercial basis and with a view to the realisation of profits (but see head (f) below)1. As regards farming on land outside the UK, its status as a trade and the treatment of any related expenditure depends on an analysis from first principles2. However, the farming of land outside the UK does fall within provisions which restrict relief for farming losses (see B5.175)

  2.  

    (b)     all farming carried on in the UK by a person, partnership or company is treated as one trade3

  3.  

    (c)     agricultural buildings (including farmhouses and cottages) previously enjoyed their own system of capital allowances (see Division B3.5), but these ceased to be available after April 2011. However, see B3.354A regarding HMRC advice on the availability of capital allowances in the pig

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