Connect with us
Advertisement
Advertisement

Farming

Farmers face hidden tax hike

Published

on

POTENTIAL changes to rules on Capital Gains Tax could lead to a tax hike for those inheriting farmland and assets, financial advisers at NFU Mutual have warned.

Many farmers can potentially pass on farms to their children free from Inheritance Tax due to Agricultural Property Relief and Business Property Relief.

As capital gains are wiped away on death, children inheriting can sell and only face Capital Gains Tax on any rise in value between the date of death and a sale.

However, in a review ordered by Chancellor Rishi Sunak, the Office of Tax Simplification has recommended that gains should no longer be wiped away on death where the estate has claimed Agricultural or Business Property relief to reduce Inheritance tax.

Sean McCann, Chartered Financial Planner at NFU Mutual, said: “Many farmers choose to hold on to their farming assets until death on the basis that not only might they be free of Inheritance tax, but also escape Capital Gains Tax if sold shortly after death.

“The Office of Tax Simplification’s recommendation that gains should no longer be wiped on death where Agricultural or Business Property relief has been claimed to reduce inheritance tax will mean bigger tax bills for some farming families.

“The biggest impact will be on those who sell farming assets they’ve recently inherited. Those that retain the assets and continue to farm won’t face any immediate tax liability under the proposed changes.

“The Office of Tax Simplification also recommended a hike in Capital Gains Tax rates that would align them to Income Tax rates, leading to larger tax bills.

“However, it’s likely that any change would be accompanied by an allowance to take account of the rise in value caused by general inflation, so any tax is only levied on ‘real’ gains.

“It’s important to stress Rishi Sunak has not yet confirmed he will agree to these recommendations, but many farming families will be watching the March Budget with interest.”

[INSET BOX]

EXAMPLE

A farmer owns a farm worth £1m which he bought 25 years ago for £300,000. He dies and leaves it to his children, who sell for £1m shortly after his death. Under current rules, if he met the criteria for 100% Agricultural and Business Property relief, they would pay no inheritance tax on the £1m and no Capital Gains Tax on the sale.

Under the proposal to abolish the tax-free update on death, while there would still be no inheritance tax due – if the farmer’s children sold shortly after his death, they would face a Capital Gains Tax bill on the £700,000 gain. Based on the existing rate (20%) that would trigger a Capital Gains Tax bill of £140,000.

“It’s important to stress Rishi Sunak has not yet confirmed he will agree to these recommendations, but many farming families will be watching the March Budget with interest.”

Farming

Welsh Government could overturn Ceredigion cattle breeder’s house plans

Published

on

A CEREDIGION councillor-backed scheme by one of the top breeders of Limousin cattle in the UK to build a home near Lampeter could be overturned following a call for it to be decided by Welsh Government, planners heard.

At the October meeting of Ceredigion County Council’s development management committee, the application, by Mr and Mrs Dylan Davies for a four-bedroom rural enterprise workers’ dwelling at Blaenffynnon, Llanwnnen, Lampeter, where they run a calving and cattle rearing business, was backed despite an officer recommendation for refusal.

One of the issues in the report for members was the financial test of whether the scheme was affordable, based on an estimate the building would cost some £292,000 to construct; at a 25-year mortgage amounting to £20,400 a year.

The size of the proposed building – which the applicants say include a need to entertain and occasionally accommodate clients – was also given as a reason for failing the TAN6 policy test, being larger than affordable housing guidance, at 202 square metres rather than a maximum of 136.

Members have previously heard the applicant breeds high-value show cattle for embryo transplanting at the well-established business, with one bull alone selling for £32,000 last year.

It had previously been recommended for refusal at the September meeting, but was deferred for a ‘cooling-off’ period to seek further details along with potential changes to the size of the scheme.

At the October meeting, members backed approval despite officers saying the size proposed could actually include a two-person bungalow in addition to the normal maximal ‘affordable’ size.

At the start of the November meeting, members heard a request for the scheme to be ‘called-in’ for Welsh Government final decision had been made, meaning Ceredigion planners’ approval could potentially be overturned if the ‘call-in’ is agreed.

Continue Reading

Farming

Welsh Government pressed on impact of new farming tax

Published

on

THE Welsh Government have been urged to clarify how many farms in Wales will be affected by the Family Farm Tax.

The calls come after farming unions rebuked claims from the UK Labour Government and Welsh Secretary Jo Stevens that only a minority of farmers will be affected by the new inheritance tax rules.

The UK Labour Government has come under heavy criticism following the announcement by Chancellor Rachel Reeves that farmers would have to pay a 20% tax on farms worth more than £1m.

When questioned on Sunday Politics about the potential impact of the new tax laws on Welsh Farmers, Welsh Secretary Jo Stevens claimed that “Three quarters of farmers will be unaffected”.

The treasury has yet to publish an estimate around the impact that the new tax laws will have on Welsh farms.

Both the FUW and NFU Cymru have expressed their concerns at the changes made by the UK Government, stating that it will cause “lasting damage to Welsh farming.”

The Welsh Lib Dems have now called on the Welsh Government to clarify how many farms in Wales will be impacted by the new Family Farm Tax rules.

Party leader Jane Dodds MS has written to the Cabinet Secretary for Climate Change and Rural Affairs Huw Irranca-Davies to express her concern over the “untold damage that farming communities throughout Wales will face as a consequence of the UK Government’s most recent budget”.

In the same letter, Jane Dodds MS pressed Mr Irranca-Davies to confirm how many Welsh farms will be affected by the new inheritance laws.

“We cannot afford to leave our farming communities in the dark when it comes to the impact of this potentially devasting new tax law” said Jane Dodds MS.

Both our farmers and the Welsh Public deserve to know the truth that lies behind Labour’s claims that only a small amount of farmers will be impacted by the Family Farm Tax. Claims that, I should add, have already been disputed by both NFU Cymru and the FUW.

The uncertainty surrounding these new inheritance laws will place more unnecessary pressure on farmers across Wales, many of whom are already struggling under a cloud of financial pressures.”

Continue Reading

Farming

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

Published

on

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.”

Continue Reading

News17 hours ago

Milford Haven man admits to downloading indecent images of children

A MILFORD HAVEN man has been sentenced after admitting to downloading over 1,000 indecent images and videos of children, including...

Business3 days ago

Bristol Trader to temporarily serve menu at the Castle Hotel

The team of a popular riverside pub in Pembrokeshire, devastated by a recent fire, will relocate to a new town...

News4 days ago

Ferry diverts to aid yacht after medical emergency alert in Irish Sea

FISHGUARD RNLI lifeboat launched on Sunday night (Nov 10) after HM Coastguard requested assistance for a 40ft yacht, approximately 28...

Community4 days ago

Those who gave their lives in service honoured at Freshwater West

A REMEMBRANCE service took place at 11:00am on Monday (Nov 11) at Freshwater West Bay, South Pembrokeshire, marking a poignant...

Community5 days ago

Remembrance service honours fallen at Haverfordwest’s war memorial

CROWDS gathered in Salutation Square for a solemn Remembrance Service at the historic Pembrokeshire County War Memorial, paying tribute to...

News1 week ago

Large fire at Bramble Hall Farm – Arson suspected

FIREFIGHTERS have brought a large blaze under control at Bramble Hall Farm in Pembroke Dock. The fire broke out in...

News1 week ago

Fire strikes popular Pembrokeshire pub – no staff or customers hurt

A FIRE broke out at The Bristol Trader pub on Quay Street, Haverfordwest, today (Wednesday, Nov 6), impacting two floors...

News1 week ago

Pembrokeshire Coastal Forum updates Pembrokeshire Marine Code

PEMBROKESHIRE COASTAL FORUM (PCF) has introduced key updates to the Pembrokeshire Marine Code, following a comprehensive review with stakeholders and...

News1 week ago

Blaze at Bristol Trader: Emergency services close Quay Street

FIRE crews have been deployed to Quay Street, Haverfordwest, after a blaze broke out at the popular Bristol Trader pub....

Crime1 week ago

Bin lorry driver banned after “squishing” man in road rage incident

RHYS GRIFFITHS, a former bin lorry driver, has been banned from driving after injuring a man by colliding with his...

Popular This Week