In this article I will be talking about a recent Scottish Land Court case concerning a dispute between a landlord and tenant of an Aberdeenshire farm. This case – Fyffe v Esslemont – concerned a landlord trying to bring a tenancy to an end, but the issues raised can equally apply to taxation.
In brief, the case revolved around whether the tenant was undertaking any agricultural activity, or instead had breached his tenancy by subletting the land. The farm had two separate areas of land:
The Land Court decided that there was no agricultural activity and the landlord gained vacant possession of the farm. For tax purposes there are a number of consequences if the owner of the land cannot show that they are an active farmer:
In conclusion it is important that the landowner is involved in the farming activities on the land and can show that they are taking some commercial risk. This may entail additional paperwork but this should be considered money well spent given the amount of tax potentially at stake.
If you need more information about the tax implications of occupying land please get in touchEmail me
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