John Henderson v HMRC

In John Henderson v HMRC [2015] UKFTT 584 (25 November 2015) the FTT found that the losses made by a farmer could not be set off against his rental income.

Mr Henderson carried out general farming activities but had done so at a loss over several tax years. His income was supplemented by rental income paid under a lease of part of his farm so that the tenant could quarry the land and excavate gravel. The issue was whether the farming losses could be claimed:

• generally if the rental income was part of his farming/trade income; or
• if it was not then ‘sideways’ against the rental income under ITA 2007 s 64.

The FTT explained that under ITTOIA 2005 ss 12 and 335 profits arising from land in respect of certain concerns (for example mines quarries...