Development Land & Farming - A Tax Planning Guide - Live at Your Desk

Introduction

This live broadcast session will consider tax planning around farm development land in terms of inheritance tax and capital gains tax for farmers with links to VAT, income tax and corporation tax with a focus on the 2024 Autumn Budget and the forthcoming reduced IHT reliefs of APR/BPR. The session will cover tax planning around small and large farm developments post the loss of BPS and moves to farming for the environment and the loss of SFI. For many farmers, small developments can give a much-needed contribution to farm profits and cashflow but the rise in building costs must be considered. The sale of farm cottages that are difficult to let out and are to be replaced with new builds etc. mindful of too many investments under Balfour and s.105(3). Consideration is given to the Statement by the Chancellor Rachel Reeves that 300,000 more houses per year will be built, amounting to 1.5 million under the term of office, which will have a big impact on farm development. We will consider hope value and BPR at 50% from April 2026 (or April 2027). This will be reviewed in the context of compulsory purchase with no hope value.

The session will also consider rollover and business asset disposal relief (BADR) with increased rates and the drop to £1 million limit together with the emergence of the “rollover buyer”. There will be links with the need to incorporate farm development (large and small) tax planning into full farm succession planning.

Find out how to move forward with tax protection and planning with a farming client with potential development land for housing against a background of massive changes to farming.

What You Will Learn

This live and interactive 3 hour session will cover the following:

• Post-Budget Autumn 2024 planning is not too late - urgent with drop in BPR but will it be April 2026 or 2027?
• Planning Permission changes - Permitted Development Rights - Class Q or R and the building of 1.5 million houses - impact on tax planning for farmers
• The impact of the reduction of the £10million limit for BADR on all farm development projects to £1million and the rollover buyer
• The role of incorporation tax planning with R&D advantages - impact on farm development in the overall succession planning
• The impact of “farming for the environment” and loss of BPS and SFI together with commercial farm operation and protection of development farmland tax reliefs - the working party
• CGT loss relief on the value of BPS entitlements to reduce CGT liabilities - the small increase in CGT to 24%
• Equalisation agreements and tax planning around pooling
• Grazing agreement without activity - risk to tax relief on development land - Consideration of the Gill case - the “working farmer” - BPR risk
• Weak contract farming agreements (CFAs) - risk to tax reliefs on development land - must be robust
• Foster - valuation of hope value - ‘top down’ not ‘bottom up’ for probate - impact on planning - the compulsory purchase acquisition
• Rollover into ‘AIM’ investments and farm improvements
• Graham, Vigne, Firth, Butler, Kingsworthy Meadow Fisheries and Tanner- BPR on development of diversified businesses s105(3). With BPR lost on 5 units in Tanner we will see the emergence of restructured “Tanner Hotel”
• The importance on the “focus on trade” on all developments tax planning and business tax relief - the Stolkin case
• Overage, slice of action schemes and opt to tax considerations
• The promotion agreement v the option agreement and tax protection
• CGT base cost of development land identification and planning and increased CGT rate
• Development of principal private residence relief and the garden development - Phillips. CGT PPR impact - the Lee case and increase in CGT
• Spring Budget 2024, especially on farming for the environment and delay in consultation into the working party
• Sale of Carbon Credits and “green washing” - purchase by developers
• Developing listed buildings - Heather Whyte plus VAT negative of Richmond Hill case
• Mixed rate SDLT - How Developments UT loss but Suterwalla win and Guerlain-Desai win and constant stream of cases - at last victories for the paddock and woodlands
• Development of farm buildings - plan ahead for VAT - Blaenau Bach Farm and complexity of zero rate for new builds, opt to tax etc.
• Bewley and Henderson - SDLT derelict buildings - is it a residence?

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.