VTAXPER74500 - Particular trades: Share farming and the husbandry of crops: Model Share Farming Agreement of the Country Landowners’ Association

  1. Inputs

1.1 The owner of the land provides:

  • the farmland;
  • the farm buildings (and house if required);
  • fixed machinery;
  • long term care of the land;
  • maintenance of the house and buildings;
  • expertise;
  • part of the working capital in the form of a share of actual inputs, and a share in the ownership of livestock.

1.2 The share farmer provides:

  • labour;
  • field and mobile machinery;
  • expertise;
  • part of the working capital in the form of a share of actual inputs and a share in the ownership of livestock.

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  1. Outputs

2.1 The owner of the land receives part of the actual commodity produced as his return for the costs that he has borne:

  • no rent is received as such;
  • no money changes hands between the parties;
  • he is free to sell his part of the commodity as he likes;
  • he submits his own VAT returns;
  • he works out his own profit and loss account for himself and HMRC according to the cost to himself of his inputs under 1.1 above, and the price he himself receives from selling his part of the commodity produced.

2.2 The share farmer receives part of the actual commodity produced as his return for the costs he has borne:

  • he is not paid for his labour nor for his machinery as such;
  • no money changes hands between the two parties;
  • he submits his own VAT returns;
  • he works out his own profit and loss account for himself and HMRC according to the cost to himself of his input under 1.2 above, and the price he himself receives from selling his part of the commodity produced.

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  1. Proportion

The proportion in which the parties:

(i) provide commodity inputs; and

(ii) receive a share of the commodity outputs

is worked out by means of a full estimated annual budget for the proposed farming system. These budgets are the key to the whole arrangement and it is not possible to set up a fair share farming agreement without preparing budgets.

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  1. Ownership of crops and stock

In share farming:

(i) growing crops are the property of the landowner whilst in the ground; ownership is divided in the agreed shares after severance from the ground;

(ii) the ownership of the livestock follows percentage shares.