Connect with us
Advertisement
Advertisement

Farming

Farmers should prepare for IHT changes

Published

on

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.”
Continue Reading

Farming

Pembrokeshire Politicians Tuck into a Farmers Breakfast

Published

on

PEMBROKESHIRE Senedd Members Paul Davies and Samuel Kurtz joined local farmers and farming representatives for a breakfast to celebrate the Farmers Union of Wales (FUW)’s Farmhouse Breakfast Week 2023. Mr Davies and Mr Kurtz attended the breakfast event in Crundale to champion the benefits of a healthy breakfast and meet with local farmers to discuss the challenges currently facing the sector.

Mr Davies said, “It’s always a pleasure to attend the annual Farmhouse Breakfast and this year was no exception. I’ve always proudly supported Pembrokeshire’s produce and today was another excellent showcase of what our local farmers have on offer. We had some very interesting discussions and I’ll certainly be doing all I can to push the Welsh Government to better support our farmers as its Agriculture Bill makes its way through the Senedd. I’d also like to encourage the people of Pembrokeshire to support Farmhouse Breakfast Week too by buying local produce and enjoying a healthy Pembrokeshire breakfast – there’s plenty of excellent produce on offer, please take advantage and help support our farmers.”

Samuel Kurtz MS, local Senedd Member for Carmarthen West & South Pembrokeshire, added:

“Farming is often an isolated industry, and so the FUW’s Farmhouse Breakfast morning in Crundale Hall presented the perfect opportunity to get everyone together, in one room, talking and socialising.

“From council farm tenants to fourth-generation cattle farmers, everyone was brought round the table to taste some fantastic locally sourced produce.

“It was great to be there supporting the FUW and the DPJ Foundation, a fantastic charity that operates across the country, supporting those in agriculture and rural communities with their mental health.”

Continue Reading

Farming

Managing Director for new Pembrokeshire creamery announced

Published

on

PEMBROKESHIRE CREAMERY LTD, the West Wales-based business currently building a new state of the art liquid milk processing facility in Haverfordwest, has appointed Mark McQuade as managing director.

Mark brings extensive dairy industry experience from previous roles as operations director of McQueen’s Dairy, national accounts director of Muller Wiseman Dairies and as an executive board director of First Milk.

Pembrokeshire Creamery Ltd will have the capacity to bottle more than a million litres of milk a week in its initial phase and gives UK supermarkets the opportunity to offer their Welsh customers milk that is both sourced and bottled in Wales rather than being driven to England for processing which is currently the case.

By removing the need for Welsh milk to be transported to bottling plants in England, Pembrokeshire Creamery will be able to reduce food miles, increase supply chain efficiency, create new skilled jobs and support local farming communities.

Mark commented: “I am very excited to be joining the team in Pembrokeshire. We aim to be the only BRC Certified facility to offer Welsh milk that is also bottled in Wales, and as such, the new facility has huge potential. I know from having worked with Pembrokeshire dairy farmers in previous roles that this is a fantastic milk field in which to build an authentically Welsh milk supply for Welsh supermarket stores.”

Huw Thomas, CEO of Puffin Produce and Pembrokeshire Creamery board member added:

“We are delighted that Mark has agreed to join Pembrokeshire Creamery as he brings with him rich industry knowledge and experience which will help accelerate our growth ambitions.”

Construction work began in November and the plant will be fully operational by the Autumn of 2023.

Pembrokeshire Creamery Ltd has also announced a multi-million pound contract with Sycamore Process Engineering to design, manufacture and install the milk processing equipment.

Paul Manning, project director at Sycamore Process Engineering said: “We bring more than 30 years of experience in the dairy, food, and beverage industry and a strong focus on sustainability, ensuring our process solutions are energy efficient, and promoting the best OPEX with minimal product wastage. We’re working closely with Pembrokeshire Creamery to develop a top of line processing facility which meets their current needs and can expand with them as the business grows in future.”

Other businesses contracted to the construction phase include DKAN for ground works, Morgans of Usk for the steel frame and ABS Elbrow for cladding.

The development of Pembrokeshire Creamery has been supported by the Welsh Government and the EU RDP-funded Food Business Investment Scheme. Additional funding has been supplied by HSBC.

Continue Reading

Farming

Calls on Welsh Government to address Pembrokeshire rural poverty

Published

on

PLAID CYMRU member of the Senedd for Mid & West Wales, Cefin Campbell, has renewed calls for the Welsh Government to commit to developing a strategy to address rural poverty in Wales.

Mr Campbell’s calls follow recent figures, published by Loughborough University on behalf of the End Child Poverty Coalition that showed Pembrokeshire had the highest child poverty rate of any local authority in Wales – with 35.5% of children living in poverty.

Challenging the First Minister, Mark Drakeford, to commit to developing a focused strategy on addressing rural poverty, Mr Campbell also highlighted wider challenges within rural communities that contributed towards a pattern of “entrenched poverty” over the course of many years and generations.

Commenting Cefin Campbell MS said: “The true extent of rural poverty is often masked by the relative affluence of some rural areas and a wider culture of self-reliance within our rural communities.

Rural communities across Pembrokeshire face many unique pressures that have contributed towards a pattern of long-term entrenched poverty. These include poor access to public transport, patchy public service provision, a lack of affordable housing, and relatively low incomes and high prices. Sadly, the developing cost-of-living crisis over recent months has merely exacerbated these factors and plunged many households into further financial hardship and uncertainty.”

Previous research from the Joseph Rowntree Foundation found that most rural households typically spend 10-20% more on everyday goods and services compared to those living in more urban areas. A recent report by Sustrans Cymru also emphasised that people living in rural areas of Wales are some of the worst affected by transport poverty – with households likely to spend more than 10% of its income on the costs of running a car.

Such financial pressures were further emphasised with research from the Bevan Foundation, published last year, finding that a typical worker in Pembrokeshire is a belt-tightening £346 a month worse off than a typical UK worker.

Cefin Campbell MS added: “The hardship being faced by Wales’ rural communities is a wake-up call – and inaction in addressing such rural poverty may very well become Welsh Labour’s legacy in Wales.

It’s time the Welsh Government committed to better identifying the many unique and exclusive factors that contribute towards this rural poverty, and work with stakeholders to bring together a strategy and vision to better empower and aid these communities”.

Speaking in response to Mr Campbell’s calls for a specific rural poverty strategy, First Minister, Mark Drakeford, said: “I recognise that there are certain factors that are unique to people living in rural areas, and I can agree with what the Member said. It is sometimes difficult to identify poverty in some of our rural communities. Of course, every part of Wales is facing a challenge at the moment—whether you live in the Valleys, in the centre of Cardiff, there are unique challenges in all parts of Wales. I can tell the Member that a plan will be drawn up. The Minister for Social Justice is currently working on practical steps that we can take to help, particularly in the area of child poverty.”

Calling for action: Cefin Campbell MS (Image file)
Continue Reading

News59 mins ago

Wales v Ireland travel advice from Transport for Wales

TRANSPORT FOR WALES is offering rugby supporters rail and bus services for Wales’ opening game of the Six Nations against...

Business4 hours ago

Planning approved for change of use in Tenby’s ‘drinking quarter’

THE RESTROSPECTIVE planning applications made by Mike Evans were granted approval by national park planners. A former national park member...

News4 hours ago

MP’s call for better County rail links to boost tourism

PRESELI MP Stephen Crabb has called on the Welsh Economy Minister Vaughan Gething to improve rail services into Pembrokeshire as...

News24 hours ago

Dyfed-Powys police precept to rise by 7.75 per cent

POLICE and Crime Commissioner Dafydd Llywelyn has announced a 7.75 per cent rise in the Dyfed-Powys Police precept for 2023-24,...

Business2 days ago

Ferry staff concerned over rumours Pembroke Dock to Rosslare route coming to an end

CONCERNS are growing amongst Irish Ferries staff operating out of Pembroke Dock as rumours continue to circulate that the company...

News2 days ago

Man sadly passed away in hospital following incident in Haven Drive, Milford Haven

POLICE and ambulance units were despatched to a residential address in Haven Drive, Milford Haven on Friday following a 999...

News3 days ago

Police: Woman, 31, died in North Court, Haverfordwest on Monday

A WOMAN in her early thirties was tragically pronounced dead at her home in North Court, Haverfordwest on Monday (Jan...

News4 days ago

Off duty firefighters stopped to assist injured motorcyclist

THE MOTORCYCLIST who was involved in the road traffic collision on Steynton Road, Milford Haven on Sunday (Jan 29) was...

News5 days ago

Strikes: Pembrokeshire schools and classes to close this week

SEVEN Pembrokeshire schools will close and 16 will be partially closed during Wednesday’s strikes by teachers. A series of strikes...

News5 days ago

Main road into Milford Haven shut due to serious road traffic collision

THE A4076 Steynton Road in Milford Haven is shut between the Horse and Jockey public house and Milford Haven School...

Popular This Week