Many farmers formed limited companies as part of their overall succession planning to take full tax advantage of the 'super-deduction' (see below) and Research & Development (R&D) capital allowance relief. The super-deduction was replaced for companies by a first-year allowance of 100% for main rate qualifying expenditure (this is known as 'full expensing') and a 50% rate for special rate qualifying expenditure is available as set out in B3.321.
The limited company can suit a large number of diversified activities, for example, viticulture operations together with operations involving risk, such as tourism and food production, and/or a lot of R&D such as work to qualify for 'farming for the environment' grants. It is therefore essential to understand how the full expensing rules work. It is true that the company will be liable to a balancing charge, should a disposal value be required to be brought into account for an asset upon which a full expensing first year allowance (FYA) has been claimed.
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Web page updated on 17 Mar 2025 17:43