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HMRC internal manual

Business Income Manual

Farming in tax law: farming outside the United Kingdom

S9 Income Tax (Trading and Other Income) Act 2005, S67-S70 and S996(1) Income Tax Act 2007, S36 Corporation Tax Act 2009, S48-S51 and S1125 Corporation Tax Act 2010

Husbandry conducted on land outside the United Kingdom is not automatically treated as a trade for tax purposes, see BIM55051.

Accordingly, whether such activities constitute trading for tax purposes is a matter for determination on normal principles (BIM20050 onwards). They are, however, within the rules relating to restriction of farming losses because the definition of farming used for the purpose of those rules does not include any territorial restriction.

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).