In the second part of his series on farming tax, Michael Steed looks at some common diversification projects, but counsels caution on the possible loss of traditional capital tax reliefs
Many farms in the UK have diversified into other commercial on-farm ventures, or are considering doing so. Using the farm’s property assets for different purposes is an easy starting point and then there are the more esoteric projects, such as llama walking and rewilding.
What I want to do in the second of my Back to Basics articles on farming is to look at some of these and ask some basic questions about the tax consequences of such projects. I’m going to stick to on-farm diversification, as opposed to, say, running a different trade from the farm, such as agricultural contracting.
The letting of property