Draft legislation accessible version
Published 20 July 2022
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1 Tax treatment of payments to farmers under the lump sum exit scheme etc
(1) An amount paid to a person (鈥淧鈥�) under the lump sum exit scheme is鈥�
(a) in a case where P satisfied the eligibility conditions when the payment was made, to be treated as amount of capital nature that is treated as a chargeable gain accruing to P on the disposal of an asset for the purposes of TCGA 1992;
(b) in a case where P did not satisfy the eligibility conditions when the payment was made, to be treated as an amount of a revenue nature.
(2) Where鈥�
(a) a person (鈥淧鈥�) makes an application for a lump sum under the lump sum exit scheme,
(b) P satisfies the eligibility conditions at any time during the interim period, and
(c) during the interim period, an amount is paid to P under the basic payment scheme,
the amount is to be treated as amount of capital nature that is treated as a chargeable gain accruing to P on the disposal of an asset for the purposes of TCGA 1992.
(3) Where鈥�
(a) a person (鈥淧鈥�) makes an application for a lump sum under the lump sum exit scheme,
(b) P does not satisfy the eligibility conditions at any time during the interim period, and
(c) during the interim period, an amount is paid to P under the basic payment scheme,
the amount is to be treated as an amount of a revenue nature.
(4) For the purposes of this section鈥�
the 鈥渓ump sum exit scheme鈥� means the Agriculture (Lump Sum Payment) (England) Regulations 2022 (S.I. 2022/390);
the 鈥渂asic payment scheme鈥� means Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009;
鈥渆ligibility conditions鈥� means the conditions in regulation 5 of the lump sum exit scheme; the 鈥渋nterim period鈥�, in relation to P, means the period鈥�
(a) beginning with the day on which P makes an application for a lump sum under the lump sum exit scheme, and
(b) ending with the scheme end date;
the 鈥渟cheme end date鈥� has the same meaning as in the lump sum exit scheme (see regulation 2(1) of that scheme).