Section 48 | Farming or market gardening

(1)This section applies if a loss is made in a trade of farming or market gardening in an accounting period (“the current period”).

(2)Relief under section 37 is not available for the loss if a loss, calculated without regard to capital allowances, was made in the trade—

(a)in the current period, and

(b)in each accounting period falling wholly or partly within the period of 5 years (“the prior 5 years”) ending immediately before the current period begins.

(3)But this section does not prevent relief for the loss from being available if—

(a)the carrying on of the trade forms part of, and is ancillary to, a larger trading undertaking,

(b)the farming or market gardening activities meet the reasonable expectation of profit test (see section 49), or

(c)the trade was started, or treated as started, during the prior 5 years (see section 50).

(4)A loss in a trade is calculated without regard to capital allowances by ignoring—

(a)the allowances treated as expenses of the trade under CAA 2001, and

(b)the charges treated as receipts of the trade under CAA 2001.