Revenue Precedent

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Revenue Precedents

If a farmer retires and leases his buildings to another farmer he cannot continue to claim the remaining farm buildings allowances in respect of the buildings. In order to qualify for the farm buildings allowances he must be carrying on farming, the profits or gains of which are chargeable in accordance with section 655. IT943518

A farmer proposes to transfer his farm to a trust under which he would retain a life interest with remainder interests to a discretionary settlement in favour of his children. The issue arising is whether the person would not be regarded as having transferred his interest to another person for the purposes of section 658(9) Taxes Consolidation Act 1997, having regard to the retention of a life interest in that asset and to the fact that it is he, rather than the trust, which will be continuing the trade of farming on the land. Where a person transfers a farm to a trust, with the retention of a life interest, there will be a transfer for the purposes of section 658(9) Taxes Consolidation Act 1997. IT923025

Farmer lets farm building to partnership in which he is a partner; is Farm Buildings allowance due? Yes, provided the building is let at market value and the payment is not in respect of services to the partnership. If the farmer introduces the buildings into the partnership, the capital allowances would go to the partnership. IT922026

If a Local Authority carries out accommodation works such as fencing as part of the compensation given for land acquired under a compulsory purchase order is the farmer entitled to farm buildings allowance in respect of that expenditure. Section 658 Taxes Consolidation Act 1997 provides that a farm buildings allowance will be made where a farmer incurs any capital expenditure on the construction of farm buildings. The agreement of the compensation terms arising under the Compulsory Purchase Order does not amount to a contract under which a farmer may be regarded as having incurred expenditure. Accordingly, such allowances are not available. 961