Future of farm cottages

The role of farm cottages in the commercial vibrant farm operation is changing. After Balfour [2010] STC 2666 let cottages became more valuable not only as a good source of income but also as a possible protection under business property relief (BPR) for inheritance tax (IHT) provisions. However the legal and tax positions of older cottages have changed since Balfour and Farmer [1999] (SpC 216) as the cost of repair and compliance has made them a challenge in terms of income return.

Negatives of owning old farm cottages

There are many compliance considerations for farmers to take into account in being a landlord (ie insulation safe electricity) and other standards for example repairs. These make being a farm landlord more complex especially with older properties. Many traditional farm cottages do not lend themselves to the letting market. The cost of bringing them up to...