BIM55275 | Farming: orchards

S33 Income Tax (Trading and Other Income) Act 2005, S53 Corporation Tax Act 2009

The initial expenditure incurred by a fruit farmer on the planting, staking, etc. of a new orchard is disallowable as representing capital expenditure (see CIR v Pilcher [1949] 31TC314).

After the trees have been planted, all subsequent expenditure on cultivations etc. is allowable in full as a revenue expense (see Vallambrosa Rubber Co Ltd v Farmer [1910] 5TC529).

Following Pilcher (see above) the expenditure incurred by a fruit farmer on grubbing up an old orchard is capital in nature.