Agricultural law update- Diversification
Barr, W
Agricultural law update- Diversification - 2002 - Solicitors' Journal 146(28) 19 July 2002, 657(1) .
Discusses trend towards diversification, and the changes in tax laws to encourage farmers in this direction. Makes the point that a landlord who permits his tenant to carry on a diversified business is likely to lose at least part of agricultural property relief for inheritance tax purposes, and consequently the holdover relief for capital gains tax. Cites "Jewell v McGowan"[2002] as an example where a landlord disagreed with the diversification arrangements of his tenant, an open farm for educational purposes, which contradicted a clause in their agreement regarding using the premises for agricultural purposes only. First judge found in favour of the tenant, that is his open farm business was only part of the farm and did not contravene the clause. However, the court of appeal found for the landlord, stating that the open farm formed a separate business. Concludes that if a farm diversification scheme consists of a separate business a tenant may need to seek totally different premises if his landlord is not in agreement.
DIVERSIFICATION
AGRICULTURAL PROPERTY RELIEFS
AGRICULTURAL HOLDINGS ACT 1986
JEWELL V MCGOWAN
BARRETT AND OTHERS V MORGAN
FARM TENANCIES
Agricultural law update- Diversification - 2002 - Solicitors' Journal 146(28) 19 July 2002, 657(1) .
Discusses trend towards diversification, and the changes in tax laws to encourage farmers in this direction. Makes the point that a landlord who permits his tenant to carry on a diversified business is likely to lose at least part of agricultural property relief for inheritance tax purposes, and consequently the holdover relief for capital gains tax. Cites "Jewell v McGowan"[2002] as an example where a landlord disagreed with the diversification arrangements of his tenant, an open farm for educational purposes, which contradicted a clause in their agreement regarding using the premises for agricultural purposes only. First judge found in favour of the tenant, that is his open farm business was only part of the farm and did not contravene the clause. However, the court of appeal found for the landlord, stating that the open farm formed a separate business. Concludes that if a farm diversification scheme consists of a separate business a tenant may need to seek totally different premises if his landlord is not in agreement.
DIVERSIFICATION
AGRICULTURAL PROPERTY RELIEFS
AGRICULTURAL HOLDINGS ACT 1986
JEWELL V MCGOWAN
BARRETT AND OTHERS V MORGAN
FARM TENANCIES