Last Wednesday saw over 100 farmers flock to the Bath and West Showground on a cold and wet evening to attend a seminar presented by Old Mill Accountants, Barclays Bank and Carter Jonas.
Oliver McEntyre of Barclays Bank spoke about the cost of funding, why banking margins have changed, how banks look at a funding proposals and the importance of producing a business plan and budgets when applying for extra funding from any bank.
I then presented a round up on farmland prices and recent trends in agricultural rents while my colleague Thomas Ireland gave a presentation on current planning issues. In this context he highlighted one or two very important recent developments, including the announcement earlier this year by central government that it is intended permitted development rights are to be relaxed in certain circumstances. Most notably this may give farmers the opportunity to change the use of an office building to a house without the need to make a formal planning application.
Anne Gardner Thorpe of Old Mill then spoke on the importance of tax planning in the context of Capital Taxes and Mike Butler, Old Mill’s Senior Partner, spoke about other tax issues including the advantages of a company structure as opposed to a partnership where income tax is concerned.
He went on to highlight that following the budget, which had taken place earlier in the day, the advantages of a company structure had become even more obvious as the government had signalled their intention to reduce Corporation Tax to 20% for all companies. However he also noted there were one or two less helpful announcements.
In particular, he explained there is an anti-avoidance provision which was announced that could significantly increase farmers’ exposure to an Inheritance Tax (IHT) charge. Mike warned, “Most agricultural or business assets qualify for Inheritance Tax relief to protect against the break-up of farms upon death. For many years it has been sensible to secure borrowing against assets that don’t qualify for this relief, which effectively reduces their value on death, and hence lowers the IHT burden.”
However, from July, it appears that this will no longer be possible, as borrowings will first be offset against assets that do qualify for Agricultural or Business Property Relief, potentially leading to huge increases in IHT.
To take everyone’s mind off such unpleasant thoughts, the evening then ended with a wholesome supper of cottage pie which was enjoyed by all before the attendees left, hopefully with food for thought as well as food in their bellies.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Oliver McEntyre of Barclays Bank spoke about the cost of funding, why banking margins have changed, how banks look at a funding proposals and the importance of producing a business plan and budgets when applying for extra funding from any bank.
I then presented a round up on farmland prices and recent trends in agricultural rents while my colleague Thomas Ireland gave a presentation on current planning issues. In this context he highlighted one or two very important recent developments, including the announcement earlier this year by central government that it is intended permitted development rights are to be relaxed in certain circumstances. Most notably this may give farmers the opportunity to change the use of an office building to a house without the need to make a formal planning application.
Anne Gardner Thorpe of Old Mill then spoke on the importance of tax planning in the context of Capital Taxes and Mike Butler, Old Mill’s Senior Partner, spoke about other tax issues including the advantages of a company structure as opposed to a partnership where income tax is concerned.
He went on to highlight that following the budget, which had taken place earlier in the day, the advantages of a company structure had become even more obvious as the government had signalled their intention to reduce Corporation Tax to 20% for all companies. However he also noted there were one or two less helpful announcements.
In particular, he explained there is an anti-avoidance provision which was announced that could significantly increase farmers’ exposure to an Inheritance Tax (IHT) charge. Mike warned, “Most agricultural or business assets qualify for Inheritance Tax relief to protect against the break-up of farms upon death. For many years it has been sensible to secure borrowing against assets that don’t qualify for this relief, which effectively reduces their value on death, and hence lowers the IHT burden.”
However, from July, it appears that this will no longer be possible, as borrowings will first be offset against assets that do qualify for Agricultural or Business Property Relief, potentially leading to huge increases in IHT.
To take everyone’s mind off such unpleasant thoughts, the evening then ended with a wholesome supper of cottage pie which was enjoyed by all before the attendees left, hopefully with food for thought as well as food in their bellies.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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