As part of ‘L-day 2022’, HMRC have published a policy paper and draft legislation to clarify the tax treatment of payments received under the Lump Sum Exit Scheme for farmers. 

Following Consultation and Responses, the Farmers' Lump Sum Exit Scheme (LSES) opened for applications in April 2022.

HMRC have now published a policy paper and draft legislation, to be included in Finance Bill 2022-23, which clarifies the tax treatment of payments received under the LSES.

It confirms that from 6 April 2022:

Useful guides on this topic

Farming: Overview
What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies?

CGT: Reliefs, disposal of a business or its assets
Which Capital Gains Tax (CGT) reliefs apply when a person replaces or disposes of an asset used by a business, the whole or part of a business, or shares in a company?

IHT Agricultural Property Relief
What is Agricultural Property Relief (APR)? When does it apply? What are the conditions and restrictions of the relief?

Flat rate scheme: Farmers
What is the agricultural flat rate scheme? Who can use it? What are the conditions? What is the benefit? What about non-farming income? 

External link

HMRC policy paper and draft legislation


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