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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4188
Experience:  FCCA FCMA CGMA ACIS
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My elderly mother in law has recently received a nice cheque

Customer Question

My elderly mother in law has recently received a nice cheque after she sold some farmland for housing. She has farmed the bit of land forever but is no longer very interested in day to day running of a farm so the rest of the family had the idea that contract farming would be a good way for the future. And our financial advisor agrees with that so we are looking to buy more farmland and get a proper contract through a solicitor so it can be contract farmed.

Our financial advisor insists any new land purchased must be near to where she lives but we have hit a problem in that we can’t find any suitable land near to where she lives. Which brings me to my simple question to you please.

What is an acceptable distance where the IR will allow contract farming to take place? There must be specific rules and it would help us as a family to make a correct decision.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Contract farming is covered in HMRC release IHTM24082. There is no mention of any distance limit in the document. A search around the web reveals no mention of distance in respect of contract farming. It is also clear that some very big organisations are involved in this activity making distance an irrelevance.

I would be inclined to challenge your accountant to prove his position. The only difficulty I can see might be inconvenience of your Mother in Law travelling to and from for supervisory landlord duties, but that could be delegated to a suitably qualified agent.

I do hope I have shown you a way forward in this matter.
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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.