Income Tax (Trading and Other Income) Act 2005

169 (1) Amend section 397 (restriction of relief in case of farming and market gardening) as follows.

(2) In subsection (5) (restriction of relief in case of farming and market gardening) for the definitions of “farming” and “market gardening” substitute—

““farming” and “market gardening” shall be construed—

(a) for income tax purposes, in accordance with the definitions in section 876 of ITTOIA 2005, and

(b) for corporation tax purposes, in accordance with the definitions in section 832 but as if those definitions were not restricted to activities in the United Kingdom.”

(3) In subsection (7) after “the rules applicable to” insert “ the calculation of the profits of a trade in Part 2 of ITTOIA 2005 or to ”.

(4) In subsection (8) for the words from “, a trade shall be treated” to the end substitute “—

(a) a trade shall be treated as discontinued, and a new trade set up, in any event which under any of the provisions of the Tax Acts is to be treated as equivalent to the permanent discontinuance or setting up of a trade; and

(b) without prejudice to paragraph (a), a trade shall be treated as discontinued, and a new trade set up, at any time when there is a change in the persons carrying on the trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on.”

(5) In subsection (10) for the words from the beginning to “any discontinuance, and as if” substitute “ Where at any time there has been a change in the persons carrying on a trade, this section shall, notwithstanding subsection (8) above, apply as if ”.