Agricultural residential lettings

Key points

• Landowners should take care that lettings to employees are not subject to a secure tenancy.
• Providing notice of an assured shorthold tenancy.
• The benefit-in-kind rules for accommodation cannot be taken for granted.
• The tenant may be exempt from a tax charge on accommodation but these will not always apply to directors.
• In some circumstances occupation by an employee after retirement will not result in a tax charge.

In these difficult times for farming with Brexit and the first Agriculture Bill in more than 40 years letting farm cottages can provide a useful source of extra income but landowners should beware of inadvertently granting a ‘secure tenancy’. Indeed much farm diversification and survival depends on such successful lettings. The legal basis under which cottages are let is a key issue for protection for the landowner and understanding tax planning. More farms are expected to come to market through death...