The farm was farmed by a father and son in partnership. They had both lived in the original farmhouse, but a new house was built to house the son. The issue was whether the new house was a farmhouse or an agricultural cottage. If it was a cottage the whole of the expenditure on it could be claimed as an allowance, but if it was a farmhouse, only one-third could be claimed.
Held: It was a cottage. The fact that the son worked full time on the farm was decisive. After referring to Lindsay, Lord Clyde said: ‘Obviously, except in some very special case, a farm can only have one farmhouse from which the business is run. In the present case, it appears to me to be clear that the father’s house is the farmhouse for the purpose of the present farm, for according to the findings, his house is the place from which the farm operations are conducted.’ The court rejected the Crown’s contention that the new house could not be an agricultural cottage because the son was not an employee but a partner: ‘In my view the status or employment of the occupier of the premises is not the test, and the proper criterion is the purpose of the occupation of the premises in question. Here, indubitably, the purpose of the occupation of this ‘Dorran’ house is husbandry, for under the partnership agreement the son for whom it was built and who occupies it must give his whole time and attention to the business of the partnership. Upon that test, therefore, it seems to me clear that the ‘Dorran’ house in question is an agricultural cottage within the meaning of section 314 . . ‘
Judges:
Lord President, Lord Clyde
Citations:
(1962) 40 TC 379
Statutes:
Jurisdiction:
England and Wales
Citing:
Cited – Lindsay v Commissioners of Inland Revenue 1953
The court was asked whether a building was a farmhouse for the purpose of deciding whether reliefs were available for capital expenditure. . .
Cited by:
Cited – Lloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2) LT 10-Oct-2005
LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could . .
Lists of cited by and citing cases may be incomplete.
Income Tax, Scotland
Updated: 04 May 2022; Ref: scu.242347