Capital Gains and other taxes manual

Section 5

The Valuation Office Agency's (VOA) technical manual used to assess Capital Gains and other taxes.

Part 1: Introduction and background

5.1 General

The Taxation of Chargeable Gains Act 1992 provides for the taxation of capital gains accruing on the disposal of assets except for those given specific exemption or relief.

The Act provides for Capital Gains Tax (CGT) on chargeable gains realised by individuals trustees and personal representatives and Corporation Tax on chargeable gains realised by companies.

5.2 Chargeable gains

A chargeable gain is broadly speaking the excess of the consideration received on a disposal over the expenditure incurred in acquiring, creating or improving the asset.

When the tax on capital gains was originally introduced in 1965 the basic principle was that it was charged on the actual gain accruing between the date of disposal and the date of acquisition or

(6 April 1965 if acquired earlier). However, for disposals occurring after 5 April 1988 CGT has been rebased to 1982 so that tax is now normally only charged on the gain which is attributable to the period since 1982.

Since 1982 the amount of chargeable gains have also been reduced by various forms of indexation allowance, aimed at excluding the element of gain attributable to inflation (see paras 5.29-32).

CGT is chargeable on the total amount of chargeable gains accruing to the taxpayer in the year of assessment after deducting any allowable losses and the annual exemption (see para 5.5 below).

5.3 Legislation

The provisions relating to CGT are now contained in the TCGA 1992, having formerly been contained in the Capital Gains Tax Act 1979 and originally the Finance Act 1965. The administration of CGT is dealt with in the Taxes Management Act 1970 and Statutory Instrument 1967 No.149. All references below are to the TCGA 1992 unless otherwise stated.

5.4 Rate of tax

CGT on a chargeable gain is charged at rates equivalent to the rates of income tax which would apply if the gains were treated as the top slice of an individual’s income. Companies are liable to corporation tax on any chargeable gain.

5.5 Annual exemption

There is an annual exemption for individuals and certain trusts. In 1995/96 this exempts the first £6,000 of an individual’s chargeable gains. (For previous years see Appendix 18).

5.6 - Occasions of charge: post transaction valuation checks (PTVC)

All taxpayers, individuals and companies, may submit any CGT valuations to their tax office for checking before they submit their returns. The main features of this service are:

i. applications must be made to the Tax office handling that taxpayer and not the VOA.

ii applications may be made only after the relevant transaction has taken place.

iii taxpayers must put forward a valuation supporting their proposed figure together with full information about the property concerned and a CGT computation.

iv although extending to simple apportionments the service is not available for complex apportionmemts where there may an underlying technical issue i.e. private residence relief.

Applications are made by submitting form CG 34, see Appendix 14, following the guidance notes set out in Appendix 15.

Further details on this procedure is set out in para 6.128.

5.7 Prior agreement of property portfolio valuations

A new service was introduced in May 2000 which enables certain companies to ask for prior agreement of the 1982 value of properties held by them since that time even if no disposals are being considered.

To enter this scheme, which is being treated as a pilot for two years from March 2000 a company, or group of companies, must meet the following requirements:

i the portfolio includes 30 or more properties held since 1982, or,

ii if fewer than 30 the properties have a current value in excess of £30 million.

Requests for inclusion into the scheme must be addressed to that companies tax office who will respond with the letter, and notes, set out in Appendix 16.

5.8 Options

It should be be noted that the grant of an option to purchase is treated as a separate chargeable asset and there will generally be no allowable expenditure (apart from any costs of drawing up the option agreement). If the option is abandoned, no allowable loss can be can be claimed by the grantee. If the option is exercised the consideration for the option is added to the consideration for the transfer and this is treated as a single transaction occurring at the date of transfer. (S.144-146).

5.9 - Allowable losses: general

Allowable losses are computed in the same way as chargeable gains. Although they do not normally give rise to a repayment of tax they can be set off against chargeable gains arising in the same or subsequent years.

5.10 - Connected persons: general

In order to forestall the transfer of assets between connected persons at little or no value for the avoidance of tax, the TCGA provides that such transfers are not regarded as bargains made at “arms length” and the property will be deemed to pass at its market value (apart from certain no gain/loss situations including transfers between spouses).

5.11 Definition

It is important to note that the Act defines “connected persons” and whilst they may be substantially the same for Income Tax, Corporation Tax and CGT purposes, the rules were extended for CTT and IHT. A summary of the position regarding “connected persons” can be found in Appendix 19 and it should be noted that persons can be connected by way of trade as well as blood.

5.12 Transfers subject to restrictive covenant (s.18(6))

If assets are transferred to a connected person subject to a restrictive covenant imposed by the transferor, then the disposal is deemed to have taken place for a consideration which is:-

a. the market value of the asset as if it were not subject to the restriction, less

b. the market value of the right or restriction, or, the amount by which its extinction would enhance the value of the asset to its owner, whichever is the less.

5.13 Series of transactions (s.19)

Where a person enters into a series of transactions with a connected persons, over a period of 6 years or less ending on the date of the last transaction, on each occasion where the market value of the asset transferred is less than appropriate portion of the aggregate market value of the asset, the disposal is deemed to be for a consideration equal to the appropriate portion of the aggregate market value.

5.14-20 Reserved

Part 2: Computation of gains and losses - introduction

5.21 General

The general rules governing the computation of chargeable gains and allowable losses are contained in Chapters III and IV of the TCGA 1992.

The computation essentially takes the following form, which is a very simplified example:

Disposal proceeds   £ A
Acquisition Costs £ B  
Indexation Allowance to April 1998* £C  
Indexed Gain   £ D =£ A -(£ B + £ C )
Taper Relief £ E  
Chargeable Gain   £ D - £ E

*This time limit does not apply to Corporate taxation to which taper relief is not applicable.

5.22 Consideration for disposal

The consideration for the disposal or part disposal is normally the price, premium, compensation, insurance money etc received and this will be ascertained by the Inspector.

Where there is no consideration, or the disposal is not at arms length, the disposal is generally deemed to be for a consideration equal to the market value of the asset and the Inspector may seek the DV’s advice in determining this sum.

5.23 - Cost of acquisition: general

The cost of acquisition will normally be the price paid for the asset. However, for disposals occurring on or after 6 April 1988, if the asset was acquired before 31 March 1982 then it is deemed to have been sold and immediately re-acquired at its market value on that date. The 31 March 1982 value will then normally be adopted as the acquisition cost.

5.24 Deemed acquisition

Where there is no consideration, or the asset was not acquired “at arms length” the acquisition is generally deemed to be for a consideration equal to the market value of the asset. A deemed disposal by a previous owner normally implies a deemed acquisition by the new owner at the same figure.

5.25 Assets created not acquired

Where an asset has been created and not acquired eg goodwill, the cost of acquisition is replaced by the expenditure if any which has been incurred in creating the asset and this is normally dealt with by the Inspector.

5.26 Other allowable expenditure: general

In addition to the ‘cost of acquisition’ the following may also be deducted from the disposal proceeds:

the incidental costs of acquisition and disposal.

any expenditure on improving or enhancing the value of the property.

any expenditure on establishing, preserving or defending title to or rights over the asset.

5.27 Incidental costs

Incidental costs include expenditure on:-

surveyors, accountants and legal fees.

costs of transfer or conveyance (including Stamp Duty).

costs of advertising to find a buyer or seller.

costs reasonably incurred in making any valuation or apportionment required for the purposes of the CGT computation.

It should be noted that the cost of making a valuation or apportionment does not extend to the cost of resolving any disagreement over it, whether by negotiation or litigation.

5.28 Expenditure on improvements etc

Expenditure incurred on the asset for the purpose of enhancing its value is an allowable expense provided it is reflected in the state or nature of the asset at the time of disposal. DVs may be asked for advice as to whether the expenditure satisfies this test. In general the expenditure must be of a capital nature and any sums which are allowable as deductions against income (eg normal maintenance costs) are excluded.

Any expenditure which will be reimbursed from public funds (eg improvement grants or compensation for abortive expenditure) is excluded by s.50.

5.29 - Indexation allowance: general

The purpose of the indexation allowance is to remove from any chargeable gain the element of gain which is due to inflation. The allowance is basically calculated by multiplying the cost of acquisition and each item of allowable expenditure by the percentage increase in the Retail Price Index (RPI) from the date of acquisition or expenditure to the date of disposal.

5.30 History of the indexation allowance

The indexation allowance was first introduced in 1982 but it did not exclude all the inflationary gain for properties acquired before that date because it only took account of some of the increase in the RPI after that date and it was applied to the historic cost of acquisition and expenditure. The Finance Act 1985 amended the provisions so that where an asset was acquired before 31 March 1982 a taxpayer could, if they wished, claim an allowance based on the market value as at 31 March 1982 rather than the original acquisition cost. The effect of this was to remove all the inflationary gain occurring after March 1982 but still not any occurring before that date. The final step was the rebasing provisions contained in the Finance Act 1988 which now broadly provides that where assets were held on 31 March 1982 the gain will normally be completed by reference to the increase in value since that date. (see Appendix 22).

For non corporate taxpayers this allowance is frozen after 5 April 1998 but it is replaced by taper relief.

5.31 Amount of indexation allowance (s.54)

The amount of the allowance is calculated by applying an indexation factor to the acquisition cost, or 31 March 1982 value, and each item of allowable expenditure. The indexation factor is calculated as follows:-

RD – RI ÷ RI

Where RD = The RPI for the month in which the disposal occurs and

RI = The RPI for March 1982 or, if later, the month of acquisition or expenditure.

5.32 Losses (s.53 as amended by the FA 1994)

The Finance Act 1994 introduced restrictions on the extent to which indexation allowances can create a loss. For disposals on or after 30 November 1993 the amount of indexation allowance to be given in a computation is restricted to an amount which does not give rise to a loss or increase the amount of a loss.

5.33 - Taper relief: the relief

Taper relief for CGT was introduced in the 1998 Finance Act as a replacement for indexation. It applies to non corporate taxpayers (e.g. individuals, trustees, partnerships).

The relief works by reducing the amount of a chargeable gain according to the whole number of years the asset has been held since 5 April 1998. The greater the number of whole years up to a maximum of 10 the smaller the gain which is chargeable to tax.

A distinction is made between Business and Non Business Assets and the levels of relief for business assets have changed since 1998.

These tables show the rates:

Non-business assets

No. of whole years in the qualifying period Percentage chargeable
1 100
2 100
3 95
4 90
5 85
6 80
7 75
8 70
9 65
10 60

For Non-Business Assets actually held on 17 March 1998 a bonus year is added to the actual complete years of ownership

Pre Rebasing Rules - Assets Acquired Before 6 April 1965

5.34 General

In certain circumstances it is necessary for the Inspector to check the gain or loss that would have arisen under the rules that existed before the rebasing provisions in the Finance Act 1988 were introduced. Prior to rebasing the base date was 6 April 1965 and any gain arising prior to that date was excluded from the computation either by means of

adopting a deemed 1965 acquisition cost at market value or

using the time apportionment formula.

5.35 Circumstances when old rules apply

Unless the taxpayer has made an election under s.35(5) to have gains and losses on all assets computed by reference to 31 March 1982 values then the Inspector will usually need to make two computations, one assuming a deemed acquisition of the asset on 31 March 1982 and a second using the old pre rebasing rules.

This comparison of the gain or loss under the two sets of rules is known as the ‘kink test’:

  • if both computations result in a gain then the smaller gain is adopted.
  • if both computations result in a loss then smaller loss is adopted.
  • if one computation results in a gain and the other results in a loss the disposal is deemed to be at no gain/no loss.
  • if the computation under the old rules results in no actual gain or loss or the old rules deem there to be neither a gain nor a loss then the disposal is deemed to be at no gain/no loss whatever the value of the rebased gain or loss.

5.36 April 1965 valuation election (sch 2 para 17)

A person may elect (but this is irrevocable) for the purposes of computing the gain, for a valuation as at 6 April 1965 on the assumption that the asset was sold and immediately reacquired at a market value on that date.

5.37 April 1965 valuation mandatory (sch 2 para 9)

A 6 April 1965 valuation is mandatory on assets owned prior to that date where the disposal consideration reflects development value.

5.38 The time apportionment formula (sch 2 para 16)

The formula is based on the assumption that the gain realised on disposal has grown at an even rate annually throughout the period of the taxpayer’s ownership. In a simple case where there is no additional expenditure the total gain will be apportioned to find the chargeable gain by using the formula:-

Chargeable gain =

Total gain x

T ÷ ( P + T )

Where T = period between 6.4.65 and date of disposal.

P = period of ownership prior to 6.4.65 (subject to a maximum of 20 years).

5.39 Additional expenditure (sch 2 para 16(4))

Where there is additional allowable expenditure the gain will first be apportioned pro rata to the respective items of expenditure and the time apportionment formula then applied to each item of expenditure substituting for P the period from the date the expenditure was incurred to 6.4.65. For expenditure after 6.4.65, P will be nil and the entire gain attributable to that expenditure is chargeable.

5.40 Assets having small acquisition cost (sch 2 para 16(5))

The time apportionment formula may not work fairly when the acquisition cost is small and substantial expenditure is incurred at an earlier date. This is because most of the gain is attributed to the later expenditure. In such cases the gain arising from the enhancement expenditure is ascertained and the remainder of the gain is treated as being attributable to the original expenditure.

5.41 - Part disposals: general

As indicated in para 5.7 a part disposal can give rise to a chargeable gain (or an allowable loss).

5.42 The part disposal formula (s.42(2))

The proportion of the costs of acquisition (or 1982 market value) and any additional expenditure attributable to the part disposed of is calculated by applying the formula:-

A

A + B

Where A = consideration for the part disposal and

B = market value of the remainder of the asset

The remaining costs are attributed to the property which is not disposed of.

5.43 Expenditure wholly attributable to part (s.42(4))

Where on the facts of the case the expenditure is wholly attributable either to the part disposed of or the part retained, it need not be apportioned.

5.44 Unit of valuation

Where there is a part disposal of an area of land which comprises a number of acquisitions, the rules for part disposals are applied to the smallest separate acquisition or number of acquisitions, which include the part disposed of.

5.45 Previous part disposal - re-basing rules (Sch 3 para 4)

Where there has been a part disposal of an asset after 31 March 1982 and before 6 April 1988, the allowable expenditure remaining after the part disposal is recomputed by reference to the 31 March 1982 value rather than cost. This enables the benefit of re-basing to be reflected in the computation of the gain is for any subsequent disposals occurring after 6 April 1988.

5.46 Previous part disposal - pre rebasing rules (Sch 2 para 16(8))

When it is necessary to calculate gain or loss under the pre rebasing rules and there has been a part disposal after 6.4.65 then on a subsequent disposal of the retained interest the chargeable gain is:

  • the gain on the retained interest from acquisition to the date of the part disposal (time apportioned if necessary); plus
  • the amount by which the final proceeds exceed the market value of the retained interest at the date of the part disposal.

5.47 Statement of practice

By a Statement of Practice the Board, in 1971, gave taxpayers the opportunity to have gains computed as if the part disposed of was a completely separate asset. The Board’s Statement is set out in Appendix 21. The DV will normally be asked to provide a valuation of the part disposed of at the date of acquisition of the whole asset.

The adoption of this basis may result in a material variation in the tax liability and it should be noted that the taxpayer cannot be obliged to adopt it.

5.48 - Small part disposals: deferment of charge

Where there is a small part disposal of land which is not a wasting asset, then if the conditions set out in either para 5.48 or 5.49 are met, the taxpayer may elect to have the tax deferred to a subsequent disposal. On the subsequent disposal the allowable expenditure will be reduced by the amount of the consideration for the part disposal.

5.49 General relief (s.242)

In order to qualify for this relief the value of the part disposed of must not exceed 20% of the market value of the entire holding and must not be a transfer between husband and wife or one within a group of companies.

This relief is not available if the consideration (or the aggregate of all considerations for disposals of land during that year) exceeds £20,000. But in assessing the aggregate of all considerations no account shall be taken of any part disposal to which para 5.49 applies.

5.50 Disposal to authority with compulsory powers (s.243)

Relief is available where there is a disposal to an authority possessing compulsory powers providing that the consideration is small compared with the market value of the entirety (small is treated as less than 5%) and the taxpayer has not taken any steps by advertising etc, to dispose of the holding. It should be noted that the £20,000 limit does not apply to relief under this section.

5.51 Acquisition cost exhausted

In no case can the above relief operate where the allowable expenditure would become negative and in such circumstances a chargeable occasion will arise. The taxpayer may however elect to set any remaining allowable expenditure against the proceeds, instead of adopting the normal part disposal formula. There will then be no allowable expenditure to set against any subsequent disposals.

5.52 - Wasting assets (s.44-47): general

Where there is a disposal of a wasting asset the expenditure incurred in acquiring, creating or improving the asset is written down due to the effluxion of time. Any indexation allowance is calculated on the written down amount.

5.53 Definition

Wasting assets are those having a predictable life of 50 years or less and include plant and machinery and life interests in settled property where the predictable expectation of life is less than 50 years.

Special Provisions apply to short leases (see s.240 and Sch 8).

5.54 Chattels

The disposal of a chattel which is a wasting asset is not chargeable unless it was or could have been the subject of a capital allowance.

5.55 Chattels which are not wasting assets

Chattels which are not wasting assets are exempt if the proceeds of disposal do not exceed £6,000.

5.56 - Consideration due after time of disposal (s.48) - general

Where the whole or part of the consideration is payable by instalments, the general rule is that the chargeable gain is based on the full value of all the instalments. No allowance is made for deferment, nor risk, nor the fact that a payment is contingent on some future event (such as obtaining planning permission for development).

The principle does not apply to mortgages granted by the vendor because in this case there is a disposal for full consideration.

5.57 Payment by instalments (s.280)

Where the instalments are due for a period exceeding 18 months the tax may be paid by instalments, at the option of the person making the disposal, over a period not exceeding 8 years and ending not later than the time when the last instalment of the consideration is due.

5.58 Consideration not ascertainable

In cases where further payments become payable after disposal which cannot be ascertained at the date of disposal the chargeable gain on the disposal will be computed by including:

  • the disposal proceeds which are ascertainable; and
  • the value, at the time of disposal, of the right to receive the further payments.

The right to receive the payments is then treated as a new and separate asset and any capital receipts will form a disposal (or part disposal) of the new asset. (See Practice Note 3 for detailed advice).

5.59-75 Reserved

Part 3: Exemptions and reliefs

5.76 - Private residence relief: general

Detailed instructions concerning Private Residence Relief are contained in Section 8.

5.77 - Roll over relief: general (ss.152-162)

Persons carrying on a trade may claim to defer payment of CGT on gains arising from the sale of certain classes of business assets if the proceeds of sale are spent on acquiring new assets within these classes, exclusively for trade purposes. Instead of paying tax on the gain the trader may elect to have the amount of the chargeable gain deducted from the acquisition price of the new assets. The process may be repeated on subsequent sales providing new business assets are purchased. When, finally, the proceeds are not invested in new asset, the whole of the gain becomes chargeable. (See also 5.199).

5.78 Classes of assets (s.155)

The relief applies to the following classes of asset namely land and buildings occupied (as well as used) only for the trade, fixed plant and machinery, ships, aircraft and hovercraft, goodwill, milk and potato quotas and ewe and suckler cow premium quotas. In the case of a dealer in or developer of land relief can only be claimed on land which forms part of the fixed assets of the trade. It should be noted that land and buildings thereon are regarded by virtue of s.155 TCGA 1992 as separate assets for roll-over relief and requests for apportionments may therefore be required by Inspectors. (See also 5.199).

5.79 Wasting assets (s.154)

Where the new asset is a wasting asset (see para 5.51 et seq) or will become so within 10 years, different provisions apply which broadly speaking limit the period of deferment to 10 years.

5.80 Part only reinvested

In general the relief does not apply if part only of the proceeds are invested in new assets. If however the amount not so invested is less than the gain on the disposal of the original asset, and in consequence part of the gain has been reinvested, that part of the gain which has been reinvested will qualify for relief.

5.81 Time limit

For relief to apply new assets have to be purchased within the period beginning 12 months before and ending 3 years after the disposal of the old assets (or such other time as the Board may allow).

5.82 Apportionments (s.52(4) and s.152(11))

Apportionments will be made by the Inspector on a “just and reasonable” basis where either a building has been used in part only for business purposes or where the old assets were not used solely for business purposes throughout the whole period of ownership.

5.83 Different trades

A person can roll over gains from assets used in one trade to purchase assets used in a completely different trade or location. (It should be noted that in this context “person” includes a company).

5.84 - Retirement relief: general

An individual who:

  • has attained the age of 55, or
  • retires on ill health grounds below the age of 55

may be eligible for relief on the disposal of chargeable business assets (including goodwill) or shares in a personal company. (ss.163, 164 and Sch 6).

5.85 Amount of relief

The amount of the relief is generally a percentage of the maximum relief. This relief is being phased out as set out in the table below. No relief is given for gains above £1 million

Year Relief at 100% gain up to Relief at 50% gain up to
1993 to 1999 £250,000 £1 million
1999/2000 £200,000 £800,000
2000/2001 £150,000 £600,000
2001/2002 £100,000 £400,000
2002/2003 £50,000 £200,000
After 2003 Nil Nil

5.86 - Hold-over relief: general (ss.165 and 260)

For gifts on or after 14 March 1989 “hold over” relief as described at para 5.206 is available on the gift of certain ‘qualifying assets’ and is subject to the following conditions:

  • application has to be made by both donor and donee (except in certain circumstances in which trustees are involved) and
  • the donor must be an individual or the trustee of a settlement
  • the donee must be resident or ordinarily resident in the UK and, unless the gift is of a business asset, must not be a company.
  • If the donee is a company it must not be controlled by non-residents.

5.87 Qualifying assets

Hold-over relief is only available where the gift is one of the following:

  • a gift of ‘business assets’
  • a gift of assets on which there is an immediate charge to Inheritance Tax
  • a gift of assets out of an Accumulation and Maintenance trust on a child reaching a stipulated age
  • a gift of heritage property
  • a gift of assets to heritage maintenance funds
  • a gift for national purposes
  • a gift of assets to political parties
  • a gift of works of art.

‘Business assets’ are defined in s.165 and include:

  • assets used for the purpose of a trade, profession or vocation carried on by the donor or the donor’s personal company
  • agricultural property which would attract relief from Inheritance Tax under s.115 IHTA 1984
  • shares in an unlisted trading company or holding company of a trading group.

5.88 Extent of relief

‘Gift’ covers any transaction other than a bargain at arm’s length. The donors chargeable gain and the recipients deemed acquisition cost are reduced by the held over gain, which in the case of outright gifts will be the chargeable gain which would otherwise have arisen (after deducting indexation allowance and retirement relief if appropriate). Where some consideration is given by the donee in excess of the donors allowable expenditure, the held over gain will be reduced by that excess.

5.89 - Other miscellaneous exemptions: general

In addition to the annual exemption referred to in paragraph 5.5, the persons, assets or events shown below are also exempted from Capital Gains Tax.

5.90 Trees growing in woodlands (s.250)

The proceeds from the sale of trees and underwood grown in commercial woodlands are excluded from CGT. Proceeds received under an insurance policy in respect of damage or destruction are similar specifically excluded.

On the disposal of commercial woodlands so much of the consideration on disposal and the cost of acquisition as is attributable to the trees and underwood is excluded in computing the chargeable gain. DVs may therefore be requested to apportion the sale price and acquisition cost on the disposal of woodland as between the value of the timber and the value of the land. Such apportionments should be on a “just and reasonable” basis (s.52(4)).

5.91 Charities (s.256 and s.257)

Charities are exempt insofar as their Capital Gains are applied for charitable purposes. In order to prevent avoidance of tax, if property ceases to be subject to charitable trusts there is a deemed disposal and reacquisition by the trustees at market value. Any gain arising from this deemed disposal will not be regarded as having accrued to a charity.

Where assets are transferred to a charity as a gift, or for a consideration less than the allowable expenditure, the disposal is at no gain/no loss.

5.92 Superannuation funds s.271(2)

Gains arising from the disposal of investments held by approved superannuation funds are exempt.

5.93 Local authorities (s.271(3))

Local authorities (as defined in s.52 FA 1974) are exempt from Capital Gains Tax or Corporation Tax.

5.94 Trade unions, friendly societies, etc (s.459-467 ICTA 1988)

The present Income Tax exemption which applies to certain friendly societies, scientific research associations and certain other bodies and to the part of a trade union’s investment income which is used for the provision of provident benefits is extended so as to grant exemption from Capital Gains Tax on chargeable gains.

5.95 Diplomatic representatives and funds exempt from income tax (s.271(1))

Exemption from Capital Gains Tax is given to diplomatic representatives, consular officials and certain other persons and also gains realised by the sale of certain funds which are themselves exempt from Income Tax.

5.96 Grants for giving up agricultural land (s.249)

Sums payable to an individual under s.27, Agriculture Act 1967, (grants for relinquishing occupation of uncommercial agricultural units) are disregarded.

5.97 Compensation to tenant farmers and business tenants

Compensation paid to a tenant displaced under the Agricultural Holdings Act 1986 or the Landlord and Tenant Act 1954 may be exempt if it arises purely from the statutory provisions.