BIM75645 - Farming losses: let-out where farming part of larger undertaking
ICTA88/S397 (4) provides that relief is not to be denied where
the loss-making farm or market garden is part of, and ancillary to,
a larger trading undertaking. The subsection is designed to meet
cases such as that of a butcher who makes a practice of fattening
bullocks for his business, or a manufacturer who grows his own raw
materials, or a seedsman or chemical manufacturer who runs a farm
for testing or improving his products.
The phrase, `part of, and ancillary to' should be interpreted
strictly. `Ancillary' means `subservient and annexed to' (see
Croom-Johnson J in Cross v Emery [1949] 31TC198). It implies a
close operating link with and contribution to the larger
undertaking.
