New queries, issue 4314

Built on their behalf

A married couple the principal partners in a family farming partnership acquired farm land some of which was leased for 30 years from 1983 to a connected trading company of which the couple were also directors and shareholders.

The lease allows for rent increases every five years but the company still pays the same rent which in 1983 more or less represented the market rent for bare land. A market rent would now be significantly higher.

The company erected buildings on the land (with planning permission). Some are used for the agricultural trades of the partnership and the company some for separate trades of the company and some are sublet to third parties at market rents on leases that are now coterminous with the head lease.

The couple are considering...