With the average age of farmers and landowners ever increasing, it’s vital that all farmers consider the implications of Inheritance Tax (IHT). Land values are continually remaining at a high level and with more farmers taking up the opportunity of property development, this can lead to a complicated taxation position. Farmers need to have taxation planning advice on a regular basis, and this should include potential succession to the farm or the possibility of restructuring the current farming enterprise, but crucially the major taxation advice needs to centre on the Inheritance tax position.
Some areas of the farming enterprise will qualify for Agricultural Property Relief (APR). This covers various farming land and buildings which are used in the farming enterprise. Another potential relief available is Business Property Relief (BPR), both these reliefs need to be considered at the planning stage for IHT as they both have an impact on the potential IHT liability.
Moreover, HMRC have received an extra 6% of tax receipts (£11.2bn) from IHT over the past 12 months so It’s now more important than ever that farmers communicate on a regular basis with both their accountants and legal advisors to ensure all the I’s are dotted and the t’s crossed. For further advice on agricultural accounting topics, please contact Lindsay.Beeston@affordbond.com or use the contact form here on our website.