BIM55095 - Farming in tax law: farming outside the United Kingdom

For CT purposes and IT before 6 April 2005 activities of husbandry conducted on land outside the United Kingdom are not within the definition of farming, see BIM55051. Whether such activities constitute trading is a matter for determination on normal principles ( BIM20050 onwards). They are, however, brought within the scope of ICTA88/S397 (restriction of loss relief where losses were incurred in the five previous years) by virtue of the extended definition in ICTA88/S397 (5).

From the 6th April 2005 for Income Tax purposes the definition of farming is extended to the occupation of land for the purposes of husbandry anywhere in the world. However, it is not a statutory trade by virtue of ITTOIA/S9 unless it is carried on in the UK. There is no practical difference in the two definitions.

Expenditure incurred by a UK farmer for the purposes of farming outside the United Kingdom is not deductible in computing farming profits (see Sargent v Eayrs [1972] 48TC573).