Albert Goodman’s Post

Some thoughts on one particular aspect of yesterday's budget: reforms to inheritance tax for agricultural land. Many are already claiming that this is a disaster for small farmers - FUW, Undeb Amaethwyr Cymru have already put out a condemnation, stating that this reform is likely to affect a majority of Welsh family farms. The NFU in Wales have stated that it means that when a farmer dies, they will have to sell off a large proportion of their business to pay the tax (rendering that business inoperable). "Misguided and ill-thought-out reforms". Is this true? What do we know of the way this tax might work in practice? Dan Neidle shared an excellent thread pointing out that according to the data, less than 500 farms will end up paying more tax as a result of this change - possibly fewer than 100. Why? In 2022 only 500 farms claimed APR of more than £1m in 2022. Married couples can easily claim the £1m cap twice over. The average size value of a farm in Wales is somewhere around £1m (according to an average size of 48ha and an average price per acre of £8500, while recognising that a few very large outliers pushes the average higher), and so the vast majority of smaller farms will fall outside of this taxable range. Wales, with substantially smaller farms and less valuable land, is the least likely area to be affected by the tax. Something I would like to hear farming unions in England and Wales tackle more is the practice of land banking. An unforeseen consequence of previous tax policy has been an uptick in wealthy individuals purchasing productive agricultural land as a tax free asset. Known as land banking, Bill Gates, James Dyson, and even Jeremy Clarkson have all admitted to engaging in this in order to dodge inheritance tax. While you can argue about the detail of the policy - I can't think of a simpler way for a government to address this problematic consolidation of land in the hands of a few mega-rich hobby farmers who are land banking to dodge paying their fair share. I would rather see huge land holdings and corporate farmland broken up and sold off to farmers who work on a more local scale. Hopefully this policy will tip the scales.

Agricultural Property Relief has been one of the potential tax advantages of buying UK farmland, so a change in the reliefs on offer will have some impact on the market. If farming businesses need to sell land to pay for inheritance tax liabilities, then this will bring more land to the market, and if there are fewer incentives to buy or own farmland, then demand may ease in some areas. Tax is not the foremost driver of land prices, but it is an important factor. Our Research team have set out a useful summary of the Autumn Budget:

The budget has sent shockwaves through rural communities and has implications for both owner-occupiers and tenant farmers. Inheritance tax changes will impact working farmers and their families the most and back tracks on the Governments promises pre-election that it would not be altered. If land now needs to be sold to pay for these tax liabilities then this will likely bring a flurry of land sales to the market with demand easing if there are fewer tax incentives. It is however important to consider that tax isn’t the biggest driver of land prices and demand but it is an important factor. For a more detailed view on the budget please click the link below: https://lnkd.in/e75hsmUw

Will agricultural property relief and business relief be scrapped, replaced, or reimagined in the upcoming #budget? If you were starting with a blank page, how would you ensure national food security, and entrepreneurship were not harmed by tax reforms? #APR #BPR #entrepreneurship #foodsecurity #IHT

The Scottish agricultural sector is bracing for significant changes in both tax frameworks and government policies. From potential updates in agricultural funding to reforms in Inheritance Tax (IHT) and Capital Gains Tax (CGT), rural landowners are facing an uncertain path ahead.   In our latest article Kenneth Mackay, Partner and Head of Land & Rural Business at Thorntons, breaks down what landowners need to know.   🔗 Read more: https://lnkd.in/enBvVpNp #Agriculture #RuralLandowners #TaxReforms #LandReform #ThorntonsLaw #SuccessionPlanning #UKBudget #CapitalGainsTax

Where a home is used for business purposes, a proportion of expenses can be claimed as allowable expenses for tax purposes, but what should this proportion be? Caroline Peters goes into more detail in the following article: https://lnkd.in/e4GVjJVt #Expenses #Agriculture #HMRC #Tax

Andrew Hardcastle is writing in todays Farmers Guardian on how Taxation is driving the Land Markets. This past month has seen a large increase in the number of both on and off market transactions across the farmland market in the Yorkshire Region, bucking recent trends of limited supply. One of the main driving forces in the current market is taxation, principally driven by the anticipated changes to the capital taxation rates and reliefs currently in place across England. The autumn budget is planned for 30th October and many experts are predicting significant increases in Capital Gains Tax rates, potential changes to rollover-relief and tightening of Agricultural Property Relief (APR), particularly in relation to let property and farmhouses. While the new Labour government wishes to show its power and make changes to taxation ... continue reading on the following link: https://lnkd.in/ebwpZ9wA

With the upcoming Budget and legislative shifts, rural landowners are facing massive uncertainty. For family farms and estates, these changes could significantly impact succession planning and long-term management strategies. In his latest article, Head of Land & Rural Business Kenneth Mackay outlines the key tax and policy changes on the horizon, offering valuable advice on how to prepare for what's ahead. 📖 Don’t miss it! https://lnkd.in/enBvVpNp #ScottishAgriculture #TaxChanges #RuralBusiness #LandReform #ThorntonsLaw #InheritanceTax #BusinessPlanning

The government has given no official statement about its proposed reform to inheritance tax (IHT), other than potential changes to non-doms and the use of offshore trusts. However, speculation is circulating about revisions including introducing higher rates, scrapping relief altogether and reform to Agricultural Property Relief (APR). While many will no doubt be impacted by potential changes, farmers and those in the agricultural industry in particular could be facing bills of up to £600k, if relief is scrapped. While larger farms may be in a better position to afford such bills, those with smaller estates and holdings could be forced to sell up and move out – a choice many would want to avoid. Environment Secretary Steve Reed previously stated that Labour had no intention to change APR, this is of course not concrete and of little comfort to those affected by the potential changes. More information on IHT, APR and other tax relief changes can be found here: https://lnkd.in/esQf25yR Be sure to follow our page for updates 📰 #iht #apr #tax #labourproposals #agriculturallaw

Following on from the Spring Budget announcements, from 6 April 2025 the scope of Agricultural Property Relief - an inheritance tax relief - will be extended. Read more on our Budget Hub. #SpringBudget2024 #WeTalkTax #Rural #Agri