Mehjoo - The Need To Appoint A Specialist
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interpretation of case
of Mehjoo v Harben Barker 
Civ 358 emphasises that general advisers do have a duty of care to
clients to specialists where the need arises. If a professional fails
to a specialist then there are considerations around the concept they
can be deemed
to be negligent for not making the referral to a specialist. Advisers
risk of straying into unfamiliar territory and inadvertently providing
In order for a
generalist firm to be obliged to refer to specialist advisers where
good and apparent reason to do so. Where does that leave both the farm
and the generalist adviser with a number of farming clients?
Action for farm
that attacks on the claims for APR and BPR are official combined with
values and the result of the Mehjoo
case, all farm tax advisers must check their position. At the very
should update engagement letters and ensure warnings are in place where
appropriate. There is huge scope for land agents and accountants to
specialist lawyers to ensure all the correct legal documents are in
partnership agreements, leases, licences, tenancies etc, and all with
appropriate tax advice in place.
adviser must make sure that all the concerns are flagged up. The
farm adviser must endeavour to highlight the need for a specialist. The
client’s reluctance to pay fees should not deter the adviser from
the warnings. There should be a review of the terms of engagement to
the firm undertakes to provide in terms of professional services.
Good and apparent
adviser be able to see the tax problems? Let’s consider the role of
solicitor and land agent and a number of circumstances that could need
specialist or would raise concern.
farming client looking to have easier farming life. Land agent suggests
actions that all land (some of which has development potential) around
farmhouse is let out under farm business tenancies (FBT) combined with
agreements which do not require the landowner to
“grow the crop of
try to deny Agricultural Property Relief (APR) on the farmhouse – not
for purpose of agriculture (s 117 IHTA 1984). The District Valuer
value” on the farm. HMRC try to deny BPR as the farm is now mainly an
investment business s 105(3) IHTA 1984.
The land agent
duty of care to suggest a tax specialist appointed when changing an “in
farming operation to a let farm. The lawyer who drafts the FBT/grazing
agreement should have also referred to a specialist. Sometimes land
draft these agreements themselves. It could well be that the farm
not have sight of the FBT nor the grazing agreement but they were
during this time to update the Will and review the IHT position. The
should have requested copies of the agreements and the accounts.
absented from the arrangement but produced trading accounts with a
investment income profit and had a duty of care to highlight the
the client and recommend a specialist unless it is set out in their
engagement that this is not their duty of care.
is likely that the land agent, lawyer and accountant will all work
the changes and it is imperative that a “memorandum of understanding”
between the advisers as to who is responsible for what and who leads on
different areas of specialist tax advice.
About the Author
Supplied by Julie Butler F.C.A.
Butler & Co, Bennett House, The
Dean, Alresford, Hampshire, SO24 9BH.
Tel: 01962 735544. Email;
F.C.A. is the author of Tax Planning for Farm and Land
Professional), Equine Tax Planning
ISBN: 0406966540, and Stanley: Taxation
of Farmers and Landowners (LexisNexis).
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Article Published/Sorted/Amended on Scopulus 2014-09-11 09:03:25 in Tax Articles