Keep eye on the ball on succession planning
We hear so much about the importance to a farm businesses’ bottom line of diversifying but also to farm in a more sustainable and environmentally friendly way, all of which I advocate.
But in doing so, we must remember not to take our eye off the ball when it comes to succession planning; after all isn’t that what it’s all about? Being able to meet the needs of the present without compromising the ability of future generations to meet their needs?
I heard an interesting stat recently – that of 590,000 deaths per annum, 275,000 are potentially taxable but only 24,500 pay inheritance tax thanks to agricultural (APR) and business (BPR) property reliefs. It may be of some reassurance when Rishi starts to look at balancing the Covid books that inheritance tax is not one of the big hitters when it comes to capital taxes.
For as long as APR and BPR are available, it is important when looking at diversification and environmental schemes that farmers maintain their agricultural and trading activity.
The danger lies in inadvertently moving to more investment activities where payments are received perhaps under stewardship or the new ELM scheme, with no agricultural or trading activity taking place.
Melanie Holt, Moule & Co rural chartered surveyors
