My client is a farmer. I am comfortable that he is carrying on the farming business on a commercial basis with a view to profit but the business is making losses. He has made losses in the last five years which have been or will be set against other income and he is now in the sixth year. If he makes a loss in this year as well he will not be able to set it against other income.
Things are a bit more marginal this year. If he makes a profit then that will reset the clock for loss set off if he makes losses again in future years. He has suggested to me that he can declare a small profit if he simply doesn’t claim a deduction for some of the farm expenses even though they are undoubtedly legitimate trading deductions. I have said to...
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