Hurdles to tax relief rising for farmers

CAPITAL taxation reliefs, not least those on property, appear increasingly vulnerable to any colour of Government’s attempts to balance the books in future years.

The advice of Central Association of Agricultural Valuers’ national secretary and adviser, Jeremy Moody, speaking at the H&H Group’s rural practice conference this week, was to not only ensure the approach taken to farming policy was watertight, but that it was also regularly reviewed.

Reviews, in particular, needed to take account of ever-changing legislation, circumstances - and the inevitable ageing of the property owner. On just that aspect alone, Mr Moody said someone of, say 65, who could be involved enough to qualify as an active farmer and tick that particular box, could soon find if they did less as they aged, they fell outside the Revenue’s criteria.

Challenge
Agricultural use, in qualifying for Agricultural Property Relief (APR), was clearly the Revenue’s challenge of 2010 for the industry. Increasingly they might request sight of SPS claims, livestock movement records, and nitrates records etc.

“The point is, the hurdles are getting higher, and remember APR is a test of use, not a financial test,” said Mr Moody.

He warned the spotlight was also now on ‘farm’ buildings. Those let to other businesses - maybe just a wood store for a joiner - could disqualify them.

Similarly, a building clearly not used for farming or anything else could fail the test - “non-use is no use,” said Mr Moody.

He advised seeking Business Property Relief where possible. Qualification for BPR as a farmer might also mean there was a farmhouse qualifying for APR.

“But make sure you can demonstrate active husbandry of the land if you want to be assessed as a farmer because the question HMRC will be asking is - ‘is this a business or an investment?’”

26 March 2010