CA40100 - ABA: Definitions
CAA01/S361 - S362
Agricultural land is land in the United Kingdom
occupied wholly or mainly for the purposes of husbandry. For ABA
purposes land outside the United Kingdom is
not agricultural land. This means that a farm
building overseas cannot be an agricultural building for ABA
purposes
CA40200.
Treat land as occupied for the purposes of
husbandry if the trade or business carried on by
the person occupying the land depends to a material extent on the
fruits (natural or commercial) of that land. You are not likely to
have any problems in deciding whether land is occupied for the
purposes of husbandry but if you want more guidance on this you
should find the cases of Lean & Dickson v Ball 10TC341 and
Jones v Nuttall 10TC346 useful.
For ABA purposes husbandry also includes:
- The intensive rearing of livestock or fish on a commercial basis for the production of food for human consumption. This brings in activities like fish farming and rearing animals in buildings.
- The cultivation of short rotation coppice. Short rotation coppice is the planting of trees at a high density with a view to harvesting them within 10 years - FA95/S154 (3).
An
agricultural building is a farm building, a
farmhouse, a cottage or other works.
The ABA legislation applies to part of an agricultural
building in the same way that it applies to a whole building.
A
farm building is a structure like a barn, a
cowshed, a chicken shack, a milking parlour or a stable.
A building used by a farmer as a retail shop is an
agricultural building to the extent that it sells farm produce. It
is not an agricultural building to the extent that it sells bought
in produce or products.
Example David runs a fruit farm. He builds a shop
on the farm where he sells the fruit that he produces and
vegetables which he buys in. As 40% of the produce which David
sells is grown on his farm and the other 60% is bought in then 40%
of the costs of constructing the shop qualify for ABA.
A
farmhouse is the building that a farm is run from.
When you decide whether a building is a farmhouse you should look
at the duties of the occupant rather than who the occupant is. For
instance, if the owner of a farm has a full time job in the city
and leaves the running of the farm to a manager it is the house
that the manager lives in and not the house that the owner lives in
which is the farmhouse. The case of Lindsay v C.I.R. 35TC289
supports this. In that case the farmer lived abroad. The head
shepherd occupied the only house on the farm. That house was held
by the Courts to be the farmhouse because the farm operations were
conducted from it.
A farm may have more than one farmhouse. If there are two
houses on the farm and the farm is run from both of them they will
both be farmhouses. For example, a farm may be owned by 2 brothers
who run it in partnership. Both of the houses that the brothers
occupy are farmhouses.
The legislation does not define cottage and so you should
give cottage its ordinary meaning. The dictionary defines a
cottage as a small dwelling house and that is the
definition you should use. If a building is so large or costly that
it cannot reasonably be regarded as a cottage it will not be a
cottage for ABA purposes. A building occupied by the owner of a
farm will be a cottage rather than a farmhouse if it satisfies the
definition of cottage and the farm is run from some other building.
If, however, the owner of the farm lives in a mansion and the farm
is run from some other building the mansion is not an agricultural
building because it is not a cottage or a farmhouse and so no ABA
is due.
Cottages occupied by retired farm workers and buildings
constructed to provide welfare facilities for farm employees are
agricultural buildings.
Other works are not defined but they include:
- Drainage and sewage works.
- Water and electricity supply installations.
- Walls.
- Planting shelter belts of trees.
- Silos.
- Farm roads.
- Reclamation of former agricultural land.
- Removal of trees or hedges that are dead, diseased or obstruct agricultural operations.
