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.”

Crime

Farmer cleared of restraining order breach at Haverfordwest court

Published

1 week ago

January 23, 2025

Tom Sinclair

A PEMBROKESHIRE man has been found not guilty of breaching a restraining order after being accused of referencing a protected individual in a Facebook post.

Philip Stoddart, 58, of Monkhill Farm, St Ishmaels, appeared at Haverfordwest Magistrates’ Court on Monday (Jan 20) to face the charge. The prosecution, led by Ann Griffiths on behalf of the crown, alleged that between December 4 and December 13, 2023, Stoddart made a Facebook post that, by inference, referred to a person he was prohibited from contacting under a restraining order imposed by Swansea Crown Court on April 16, 2021.

The restraining order, issued under Section 360 of the Sentencing Act 2020, barred Stoddart from making any form of contact with her.

Prosecutors argued that the Facebook post constituted a breach of the order, contrary to Section 363 of the same act.

Stoddart denied the allegations and entered a not guilty plea during a prior hearing on October 1, 2024.

Magistrates Professor N. Negus, Mr. J. Steadman, and Mrs. J. Morris presided over the trial, which concluded on Monday.

After reviewing the evidence, the bench found Stoddart not guilty, dismissing the case.

The dismissal brings to a close legal proceedings that had been ongoing for over a year.

Farming

Get up to £5,000 for on-farm trials in Wales

Published

1 week ago

January 23, 2025

Tom Sinclair

FARMERS in Wales are being called to apply for the next round of funding for on-farm trials.

The Farming Connect initiative, which has funded projects such as growing lucerne in Brecon, is inviting applications for the Try Out Fund.

The new application window opens on January 27, 2025, and will run until February 17.

Successful applicants will be awarded up to £5,000 to help fund trials that experiment with new ideas on their farms.

The last round of funding supported several projects, including integrated pest management at a pick-your-own strawberry enterprise.

Menna Williams, the Farming Connect project lead, said: “Farming Connect has developed the Try Out Fund to address specific local problems or opportunities with the aim of improving efficiencies and profitability within agricultural businesses whilst protecting the environment.”

She added: “There are many changes on the horizon for agriculture, and now is a great time for farm businesses to explore an idea that could benefit them, allowing farms to tackle ‘real’ problems or check if a research idea works in practice.”

The fund is open to individuals or groups of up to four farmers and/or growers in Wales who have identified a local or specific problem or opportunity.

Ms Williams said: “Because these ideas are initiated by farmers themselves, they are really passionate about them, giving them 100 per cent effort right from the start.”

Projects should focus on enhancing production efficiencies and profitability while ensuring environmental protection through adherence to sustainable land management principles.

A guidance handbook is accessible on the Farming Connect website, providing support for farmers in outlining their projects and completing the application process.

To apply, individuals must be registered with Farming Connect and capable of finishing their projects by January 2026.

Ms Williams explained: “Funding can be used for technical assistance, sampling, testing and other reasonable expenses such as those relating to short-term hire of specialist equipment or facilities directly relating to the project.”

The findings will be shared with other producers in Wales by collaborating with a Farming Connect team member.

Interested parties can apply on the Farming Connect website.

To receive the link or get further information, contact [email protected].

Farming

Funding window to re-open for on-farm trials in Wales

Published

1 week ago

January 23, 2025

Tom Sinclair

WITH Farming Connect-funded trials ranging from growing lucerne in Brecon to establishing sunflowers as a companion crop with maize, farmers are being invited to apply for the next round of funding from the initiative that brought these projects to life.

The new application window for the Try Out Fund opens on 27January2025 and will run until 17 February. Successful applicants will be awarded up to £5,000 to help fund on-farm trials that experiment with new ideas. The last round of funding saw farmers supported for several projects including integrated pest management at pick your own strawberry enterprise.

Project lead Menna Williams of Farming Connect said the aim is for farmers to compare different treatments or management systems – the project is not intended to fund new equipment she stressed.

“Farming Connect has developed the Try-Out Fund to address specific local problems or opportunities with the aim of improving efficiencies and profitability within agricultural businesses whilst protecting the environment,’’ she said. “There are many changes on the horizon for agriculture, and now is a great time for farm businesses to explore an idea that could benefit them, allowing farms to tackle ‘real’ problems or check if a research idea works in practice.’’

The fund is open to individuals or groups of up to four farmers and/or growers in Wales who have identified a local or specific problem or opportunity.

“Because these ideas are initiated by farmers themselves, they are really passionate about them, giving them 100% effort right from the start,’’ said Ms Williams.

Suitable projects must aim to improve production efficiencies and profitability whilst protecting the environment by aligning with sustainable land management outcomes. A guidance handbook is available on the Farming Connect website to help farmers scope their project and complete the application form.

Applicants must be registered with Farming Connect and be able to complete their projects by January 2026.