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Chapter IHTM24036

Document Cited authorities 2 Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM24036
CourtHM Revenue & Customs

A residence must be either a ‘cottage’(IHTM24034) or ’farmhouse’ to come within the definition of ‘agricultural property’ in s115(2) IHTA.

A number of decisions have impacted on our view of what a -‘“farmhouse’ 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 ’a farmhouse is the place from which the farming operations are conducted’

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

Lloyds TSB Banking v Peter Twiddy (Inland Revenue Capital Taxes) [DET/47/2004], in which it is stated ’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 basis’ These statements lead to the conclusion that the occupant of a ’farmhouse’ must be a farmer. In other words, the person farming the land on a day to day basis. Whether a person is actually a ‘farmer’ of the land’ will depend on all the facts of a particular case. So, a person with overall control of an agricultural business is not necessarily a ‘farmer’. 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 ‘farmer’ of land is a person whose principal occupation consists of farming the land.

The test is therefore...

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