Farming

Farmers should prepare for IHT changes

Published

4 years ago

November 19, 2020

FARMERS should review their Inheritance Tax (IHT) and succession plans ahead of the Spring Statement as potentially significant changes are expected, according to rural accountant Old Mill.
There are less than six months before the Spring Statement, and changes to the IHT format – based on recommendations originally outlined by the Office of Tax Simplification (OTS) in July 2019 – are likely. “The recommendations were primarily geared towards streamlining IHT administration but may have the secondary effect of reducing some of the favourable reliefs available to farmers,” explains Catherine Vickery, associate director at Old Mill.
“Current IHT legislation can be very beneficial for farmers, giving confidence that they can pass down agricultural business and property assets to the next generation tax free on death,” she adds. “Unfortunately, the coronavirus pandemic has left the Government with a very large debt, so there’s potential that it will implement any OTS recommendations to increase tax revenue.”
So, with the Spring Statement anticipated for March, what can farmers do to mitigate any potential changes?
“Under the existing rules, agricultural land and property qualify for Agricultural Property Relief (APR) from IHT at up to 100%,” explains Mrs Vickery. Other land and property assets, like diversified enterprises, can qualify for up to 100% Business Property Relief (BPR) as part of an overall farming business which is at least 50% trading. “These reliefs can apply on lifetime transfers as well as on death where the conditions are met.”
Transfers on death currently also qualify for Capital Gains Tax (CGT) free uplift so that gains are effectively washed out. Lifetime transfers of agricultural land, property, and businesses which are at least 80% trading qualify for gift holdover relief, meaning gains can be deferred until a later disposal.
However, a key OTS recommendation is to remove the CGT free uplift on death when IHT relief is also available. This would mean that the next generation would inherit the farm at an historically low base cost, leading to higher CGT on any future sale.

The OTS has also just released its report into CGT simplification which echoes this same recommendation. Proposals to alter the trading test for BPR, aligning it to the 80% CGT trading test could leave farmers ineligible for 100% BPR, which could result in assets having to be sold to pay IHT liabilities.
“The most tax efficient option has often been for farmers to continue to actively farm and hold onto assets until they die,” says Mrs Vickery. “Now, given speculation about potential changes, the best course of action is to get a succession plan in place as soon as possible and start implementing it.
“Plans need to be arranged based on what is right for you, your family and the farm right now, rather than how things might stand at a later date.”
This means establishing who is taking on the assets and if they have the skills needed to drive the business forward. “Pass over this responsibility while you still can and while you can be on hand to guide and support your successor,” advises Mrs Vickery.
It’s also important to review partnership or shareholder agreements, and consider the handing on of other assets. Additionally, farmers should collate any trust and gift deeds, so that paperwork is on hand to be reviewed.
“Though we suspect the new IHT rules won’t be favourable, farmers need to make use of the rules we have now as these are a current certainty,” says Mrs Vickery. “Succession planning is so easy to put off but it’s a vital tool in safeguarding the future of farming businesses.”

Farming

Pembrokeshire farmer’s award for outstanding service to Welsh dairy industry

Published

1 week ago

October 29, 2024

Tom Sinclair

DAIRY farmer, Stephen James, from Gelliolau farm in Clunderwen, Pemborkeshire has been presented the FUW Outstanding Service to the Welsh Dairy Industry award at the Welsh Dairy Show 2024 in Carmarthen.

Presenting Stephen with the award will be FUW President Ian Rickman during the Welsh Dairy Show held at the United Counties Showground in Nantyci, Carmarthen on Tuesday 22 October 2024.

Ian Rickman, FUW President said: “The judging panel were delighted with the nominations this year, but Stephen’s diligent and relentless work for over 20 years representing the industry in a public role on the issue of Bovine TB in particular placed him on top.

“A worthy winner, Stephen has used his own experience of dealing with TB on his own farm business, having been in and out of restrictions for over a quarter of a century, to highlight the main issues that affect Welsh farmers, publicly.”

Stephen is Chairman of the Wales Animal Health and Welfare Framework a position he has held since July 2018. As Chairman, working closely with Wales’ Chief Veterinary Officer, Stephen works to make improvements in standards of animal health and welfare across Wales.

He has also been a leading figure in representing the concerns of Welsh farming to the Government. As an industry representative on the Welsh Government TB programme board, he has undertaken countless bilingual media interviews to local, national and international broadcasters. He highlights the impact the disease has on farming families and the need for the Welsh Government to implement a Comprehensive TB Eradication Strategy.

On winning the award, Stephen James said: “Receiving this award is a huge privilege. It was quite a shock to hear the news. I am extremely grateful to receive the award, especially at an event that is so close to my heart and is so important to the milk sector in Wales. Thank you so much for the honour.”

Stephen James has held a wide range of positions within NFU Cymru from Local Branch Chairman to President (2014 – 2018). He has worked on a number of significant policy areas including the Common Agricultural Policy Reform and Brexit, dairy issues and an influential figure during the trying times of the 2012 milk crisis. Stephen, alongside other UK farming union leaders, addressed the July 2012 dairy farmers Westminster Hall Rally.

Passionate about supporting the next generation of farmers, Stephen shared the responsibility for his farm business at Gelliolau to his son, Daniel, at a young age. He has been heavily involved with the Wales Young Farmers, both locally and nationally holding a number of positions including Pembrokeshire County Chairman, Pembrokeshire County President and Wales YFC Council member.

A long standing member of First Milk and a Director and past Chairman of Clynderwen and Cardiganshire Farmers, he truly believes in the values and principles of co-operative organisations.

He is former President of the Pembrokeshire Agricultural Society, a President and active Board Member of Clunderwen Show Society, a past Chair of Clunderwen Community Council and member and past Chairman of Narberth Grassland Society. Stephen James is also a Fellow of the Royal Agricultural Societies.

Ian Rickman concluded: “Stephen James has truly made an outstanding contribution to the Welsh Dairy Industry. We are delighted to present him with this FUW award in recognition of the years of work he has carried out on behalf of Welsh farmers. On behalf of the FUW, I congratulate and thank Stephen for his work.”

Farming

Community farm brings support and skills to veterans in Pembrokeshire

Published

1 week ago

October 28, 2024

Tom Sinclair

A COMMUNITY farm in Pembrokeshire is making a difference for veterans and vulnerable individuals by blending nature-based activities with therapeutic support.

Founded by Daisy Coleman in 2019, Redberth Croft CIC became an officially registered Community Interest Company in 2024. Since its inception, the farm has offered a host of engaging activities, from gardening therapy and animal-assisted sessions to creative workshops and rural skills training, all aimed at fostering resilience and personal growth.

One of its standout initiatives, ‘Hedging Your Vets,’ received support from the Port of Milford Haven Community Fund. This unique project provides veterans with training in traditional hedgelaying—a skill that preserves biodiversity while promoting mental wellbeing. Running throughout the winter, the programme equips participants with practical skills that open pathways to potential employment in conservation and sustainable agriculture.

To further its mission, Redberth Croft CIC collaborates with organisations such as The VC Gallery and The Tenby Project. Together, they work with local authorities to deliver day services that enhance inclusion and accessibility for individuals facing learning disabilities and mental health challenges.

More than just a farm, Redberth Croft CIC serves as a community hub, offering a supportive space for individuals with complex needs to build confidence, learn new skills, and form meaningful connections. Its core belief is that green health initiatives and nature-based therapies can offer significant therapeutic benefits to those in need.

For those interested in participating in the ‘Hedging Your Vets’ project or other future courses, further details can be found on Redberth Croft CIC’s website and social media channels.

Through its work, Redberth Croft CIC is cultivating a compassionate and resilient community in Pembrokeshire, promoting both personal growth and environmental conservation in a safe, welcoming environment.

Farming

Kurtz’s showdown with Government over Sustainable Farming Scheme

Published

2 weeks ago

October 24, 2024

Tom Sinclair

MEMBER of the Senedd for Carmarthen West and South Pembrokeshire, Samuel Kurtz, today (Oct 23) called on the Welsh Labour Government to acknowledge their failures in developing the Sustainable Farming Scheme (SFS).

The SFS, intended to replace the Common Agricultural Policy following the UK’s departure from the EU, has encountered significant challenges. These range from its widespread unpopularity among farmers—due to the enforced tree-planting on productive farmland—to the ongoing uncertainty surrounding the funding levels that farmers can expect.

Speaking after the debate, Samuel Kurtz said: “It was the responsibility of everyone in the Chamber who cares about farming and rural communities to forcefully highlight the inadequacy of the SFS in its current form.

“The Welsh Labour Government should be ashamed of their failure to engage properly with farmers. It should never have taken thousands of farmers descending on Cardiff Bay, nor the symbolic placement of wellington boots on the steps of the Senedd, to make the Government finally stop and listen. Speaking at that event was one of the proudest moments of my life, but it should never have been allowed to get that bad that farmers felt compelled to protest.

“The Welsh Government must now act swiftly to address these issues. Farmers need clear answers to plan for their future, their livelihoods, and their communities. If the SFS is not developed and implemented correctly, farming across Wales will be put at risk.”

Also this week, James Evans MS, Welsh Conservative Shadow Rural Affairs Minister, said: “The farming community has expressed disappointment that their concerns around Labour’s Sustainable Farming Scheme are being ignored despite multiple consultations.

“Additionally, the deeply unpopular 10% tree cover requirement risks losing valuable farmland. Yet, despite legitimate concerns, Labour presses on.

“The Welsh Conservatives support a farming model that rewards good practices, offers fair incentives, and includes farmers in decision-making. Labour’s Rural Affairs Minister claims to be listening to the community, yet no evidence of this has materialised, he is simply paying lip service to our farmers.”