CG77940 - Europe: milk quota: miscellaneous points
Not a wasting asset
Although the milk quota scheme was originally set up for only a limited period, we do not regard quota as a wasting asset, TCGA92/S44. A producer holds quota to produce and sell milk profitably and will continue to do so for as long as the scheme lasts. There was no expectation, therefore, either in 1984 or at any later date, that quota had a finite life of less than 50 years.
Partnerships
Milk quota allocated to a holding farmed in partnership is regarded as a partnership asset. Any consideration received on a disposal of quota will, therefore, be allocated among the partners in accordance with the normal rules for partnership assets, see CG27350.
Tenant Farmers: Termination of tenancy
If a tenancy is terminated then the milk quota reverts to the landlord. In these circumstances, the outgoing tenant may seek the landlord’s permission to dispose of the quota. If that happens, the landlord may receive a payment from the tenant.
Where agreement to sell is not sought, then the tenant and landlord may agree an amount of compensation payable to the tenant for the loss of the quota. If no agreement is reached, then the tenant is entitled to statutory compensation, Section 13 Agriculture Act 1986.
Agreed compensation
If the compensation is paid under a contractual agreement which provided for the reversion of the quota, then the normal rules in TCGA92/S28 apply. The date of disposal will be the date on which:
- an unconditional contract was entered into
or
- a conditional contract became unconditional.
CG14250+ tell you about disposals under contract.
Statutory compensation
If the compensation was paid under a claim to statutory compensation, the date of disposal is the date of receipt of the compensation. CG72300+ tell you about statutory compensation under the 1986 Act generally.
Valuation
Where statutory compensation is paid, this is calculated by the District Valuer. If, therefore, you need to obtain or check a valuation of quota for any reason, in apportioning mixed quota for example, the District Valuer may be able to help you. Requests for help should be made by memo, not on form CG20.