Was inherited land a business asset?
A recent case before the First-tier Tribunal examined the applicability of Business Asset Taper Relief (BATR). In this case a taxpayer appealed against a Closure Notice from HMRC that the sale of land was not a business asset. HMRC amended the taxpayers self-assessment return to disallow BATR of over £150k.
The land in question was inherited by two brothers in 1998. The appellant argued that the land was farmed under conacre arrangements until the asset was sold in 2007. ‘Conacre’ is a method of farming land that has been used across the island of Ireland since the 1800’s. One form of conacre referred to in this decision is known as ‘agistment’.
HMRC argued that this was not the case although they seemed to accept that the appellant may have carried out some work on the land in question. HMRC’s position was clear that the appellant was not carrying out sufficient acts of husbandry to be classed as farming within the meaning of the relevant legislation.
The First-tier Tribunal looked in detail at many similar cases and ultimately were‘strongly influenced by the traditional understanding, articulated by a succession of distinguished judges and commentators over the course of more than a century, that the grantor of an agistment licence himself remains in occupation, with the agistor having only some lesser interest’.
This strongly supported the appellant’s position and the First-tier Tribunal found the appellant’s occupation was therefore wholly or mainly for the purposes of husbandry. The taxpayer’s appeal was allowed and BATR was due for the whole period of ownership from 1998 to 2007.