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HMRC internal manual

Business Income Manual

Farming in tax law: Intensive livestock enterprise/fish farms

S221-S225 Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), S996(1) Income Tax Act 2007, S36 Corporation Tax Act 2009, S1125 Corporation Tax Act 2010

To fall within the statutory definition of `farming’ (see BIM55051), the produce of the activity must have some husbandry origin in the land occupied by the person carrying on the activity. Thus, an intensive enterprise, in which livestock are kept entirely separate from the land (for example entirely indoors or, in the case of fish, in tanks), and fed entirely on purchased feed, is not farming (see Lean & Dickson v Ball [1925] 10TC341, Jones v Nuttall [1926] 10TC346, and Peter Reid v CIR [1947] 28TC451).

However, for the purposes of the averaging provisions of S221-S225 ITTOIA 2005 the definition of `farming’ is extended to include the intensive rearing of livestock or fish on a commercial basis for the production of food for human consumption.