"Income Shifting" Farmland

[ORCHARDHALL]

Would be very grateful if a fellow professional could point me in the right direction of the relevant legislation:

I was recently approached by a sole trader to undertake his annual accounts (circa £20,000 sales). Quite straightforward, until he stated that he receives approx £15,000 a year from a farmer that rents land off his parents farm. It appears that his parents have said that he can receive the rental money received, even though it is not his land.

I explained that I was not comfortable with the fact that he was in receipt of this money, that it should be taxable in his parents hands. If someone could point me to the legislation that illustrates this I would be very grateful, as potential client is now concerned, but his sisters Accountant staters that is quite acceptable.

Thanks

[pawncob]

Is there any documentation to back up this agreement?
If there isn't then the rents are assessable on the parents, who then make a gift of (say)£15k to the son.
I assume that he is not a farmer by trade and is not involved in his parents' farming activities.
The legislation was ICTA 1988 s15 (Schedule A) as amended by the 1995 Act.

[ORCHARDHALL]

Thanks for your initial consideration. I am fairly certain that no written agreement exists, even if it did, what type of agreement allows for the income to be "shifted"

Thanks