Your World of Legal Intelligence
 United Kingdom | +44 (0) 20 7284 8080

Chapter BIM55165

Document Cited authorities 1 Cited in Related
Vincent
Published date22 November 2013
Record NumberBIM55165
CourtHM Revenue & Customs

Experience has shown that the following grants may give rise to doubt or difficulty.

Farm woodland premium scheme

Under the Farm Woodland Premium Scheme and its predecessor, the Farm Woodland Scheme, farmers receive annual payments to compensate for lost farming profits. Unlike most woodland grants, and despite the fact that the woodlands themselves are likely to be commercial woodlands and thus outside the scope of Income Tax, these payments are taxable as part of the farming profits.

If someone buys the woodland which previously attracted the annual payments under the scheme, they may continue to receive these payments. The receipt of these payments will, however, be as the owner of commercial woodlands rather than as a farmer whose land has been turned to woodland. As such, receipts under the scheme will escape tax as being receipts from commercial woodlands.

Apple orchard grubbing up scheme

Under this scheme apple growers may receive grants in respect of any trees they `grub up’ (that is, dig up). Such grants are not, in contrast to payments under the Set-Aside scheme, treated as income in the growers hands. They may however attract Capital Gains Tax liability (see CG78110 onwards).

Management agreements

There are various provisions (for example, the Wildlife and Countryside Act 1981) under which farmers may receive payments for managing their land in a particular way. Where the payments under such agreements are made annually there is no doubt that the sums are income for tax.

Sometimes, however, farmers receive a lump sum for managing their land in a particular way for a period of years. In this situation you may meet the argument that the payment is capital because it represents compensation for some sort of sterilisation of the land.

But the farmer is not prevented from using the land for the trade of farming. The management undertaken by the farmer comprises acts of...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT