When an asset is attached to land, it becomes part of the land as a fixture and ownership will pass with the freeholder. This is all very relevant in the case of farms, where a structure like a grain silo is probably a fixture. In this article we are going to consider the situation where a farm has been incorporated with the land remaining outside the company, still belonging to the landowner. The company then incurs cost in adding an asset like a grain silo to the land.
It is quite common for there to be no written agreement between the landowner and the company concerning the company’s use of the land. It might cause some consternation to the company directors when they are told that they may not be able to include that new grain silo in the balance sheet. It can also give some tax headaches which we look at below.
The occupation of the land will usually be treated as a tenancy at will, which can come into effect by implication. This is not strictly a lease and has little or no protection or tenure for the company. It is often seen as a stepping stone to a more formal agreement.
Here is the article in Croner which discusses this further