The appellant’s sideways relief claims in respect of farming losses were allowed as the statutory ‘reasonable expectation of profit’ test was satisfied for all relevant tax years.

The appellant (a general businessman with no previous experience of running a farm) purchased a working farm and around 75 acres of surrounding agricultural land in January 1995.

At an early stage in his ownership, the appellant decided to convert the farm to organic production and increase its size substantially to obtain benefits of scale. He also decided to work towards ways of selling directly to the public and made other significant changes to the running of the farm. The appellant acquired further agricultural land, and the farm subsequently extended to 438 acres.

The farm generated losses in all years from the appellant acquiring it until 2012/13 (which were partly attributable to a downturn in the market for organic food, and to his generous