Particular trades: income tax

1. Share farming

1.1. Contract between landowner and working farmer

1.2. Each share costs and take a share of what is produced

1.3. If genuine share farming agreement, HMRC view both parties as carrying on a farming business

2. Key points

2.1. [Particular trades: income tax](https://library.croneri.co.uk/cch_uk/etc/6300)

2.1.1. All trades operate differently

2.1.2. Specific tax legislation can apply to some trades

2.1.3. Case law and HMRC guidance can help with how to apply rules

2.1.4. [In-depth guidance on a wide range of trades](https://library.croneri.co.uk/cch_uk/btr/265-000)

2.2. [Farmers and market gardeners]( https://library.croneri.co.uk/cch_uk/etc/6302)

2.2.1. All UK farming and market gardening treated as a trade

2.2.2. Relief from fluctuating profits

2.2.3. Loss relief restriction

2.2.4. Herd basis

2.2.5. Share farming

3. Relief from fluctuating profits

3.1. Can claim to average profits over 2 or 5 years

4. No relief against general income if loss in each of 5 previous years

4.1. Restriction of loss relief

4.1.1. No relief against general income if loss in each of previous 5 years

4.1.2. No restriction if reasonable expectation of profit test met

4.1.3. No restriction if complete change in person carrying on the trade

5. Farmers and market gardeners

5.1. All farming and market gardening in UK treated as a trade

5.2. Farming = occupying land for the purposes of husbandry

5.2.1. All farming carried on by a person = one single trade

5.3. Market gardening = occupying land as a nursery or garden for the sale of crops

6. Herd basis

6.1. Election can be made for production herds

6.2. Cost of herd additional animals which are not replacements not deducted as an expense

6.3. Value of herd not brought into account

6.4. Capital profit or loss if substantial amount of herd sold within 12m and not replaced within 5 years

6.4.1. Wasting asset exemption will apply