Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Managing farm losses using five-year averaging rules

23 January 2018 / Wayne Glenton
Issue: 4632 / Categories: Comment & Analysis
istock-473247268_fmt

Farming fluctuations

KEY POINTS

  • Five-year averaging is introduced from 2016-17.
  • A question over loss relief in the extended period.
  • Interaction of averaging time limits and the loss claim deadline.
  • Will tax planning benefits be reduced or negated in loss situations?
  • Difficult choices when filing a return.

From 6 April 2016 farmers have had the option to average their taxable profits over two or five years – an extension to ITTOIA 2005 Pt 2 ch 16. The clear intention was to offer greater flexibility to farmers’ fluctuating profits and to recognise that volatility can occur over more than two years.

Initially the changes appeared attractive (and they are) but there is some confusion over what to do with losses being carried in the newly extended averaging period – in other...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon