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HMRC internal manual

Business Income Manual

Farming: receipts for grants of easements or wayleaves

S33 Income Tax (Trading and Other Income) Act 2005, S53 Corporation Tax Act 2009

An easement is the right to use, or to restrict the use of, the land of another person in some way. A wayleave is the right to use a defined area of land for purposes unrelated to its primary use.

A lump sum payment to a farmer for the granting of an easement or wayleave (whether in perpetuity or for a term of years, and whether or not under an enactment incorporating compulsory powers of purchase) to place, construct or maintain a pipe, main, cable etc in, on, over or under land should be dealt with in accordance with the instructions at BIM40115. Thus, any element of compensation received for temporary loss of profit, or for damage to crops or to reimburse revenue expenditure on the repair of damage to land or buildings falls to be included as a receipt of taxable trading receipts. As regards capital gains, see CG12945.

Where yearly payments are received, see PIM1050 onwards.