envisages principally a situation where the tenant acquiring the
freehold sells
all of the land of which he or she owns the
freehold.
Our trading argument may be weaker where only part of the
land is sold. This may occur for example when a tenant farmer buys
the freehold of the farm but sells off the farmhouse and 'garden'
retaining the agricultural land.
Our trading argument may be weaker because the purpose of the
acquisition of the freehold is less likely to have been for
disposal of the land by way of a trading transaction. More probably
it will have been to acquire a capital asset for the existing
(farming) trade, the subsequent sale of part being merely a
rationalisation of the land holding.
Each case will depend on its own facts but as a rule of thumb
the smaller the part subsequently disposed of the weaker the
trading argument becomes.
Please submit cases of doubt or difficulty to Business Tax
(Technical).
