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Letting of farm land

An owner of farm land may let their land to a tenant instead of farming it themselves. It is a basic rule that the letting of land is not taxed as a trade, and this rule is applied even where a landowner undertakes certain management functions¹. As a consequence, income received by a landowner from a tenant who farms the land is property income² (see Part B6). The tenant, as occupier of the farm land, is taxed on trading profits as a farmer³, see B5.105.

APR and tenanted land

In the 2024 Budget the consultation of environmental land management and ecosystems confirmed that the government would not restrict APR to tenancies of at least 8 years as had been proposed in the Rock Review on tenant farming⁴.

At Spring Budget 2024 the Government added the detailed consultation response⁵ and confirmed that the Agricultural Property Relief (APR) will be extended from 6 April 2025 to land managed under an environmental agreement