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HMRC internal manual

Capital Gains Manual

Compensation: displaced tenants: compensation for loss of milk quota

Where the displaced agricultural tenant was a dairy farmer, he or she will have beenforced to transfer the farm’s milk quota to the landlord. This is a requirement of themilk quota regulations.

The Agriculture Act 1986 provides that the tenant should receive compensation in suchcircumstances. Even if the compensation received under the AHA 1986 is exempt from CapitalGains Tax, the compensation for the loss of the milk quota will be within the scope ofCapital Gains Tax, see CG77942+.