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Rural Professionals Breakfast                5 February 2013     Mark Charter, Partner and Head of Rural           mark.ch...
"If People have full stomachs they can have the          luxury of multiple problems – if you are hungry you only have one...
Committed to reduce form filling/bureaucracy  Food self sufficiency  CAP reform – there is a role to play for public mo...
Outlook Poor crop establishment Rising food prices Increasing concern about disease control CAP reform uncertainty La...
CAP reform: Current system ends on 31 December 2013 Golden ticket or simple carry forward? Irish presidency until end o...
Current   Ash dieback (chalara fraxinea) preventative measuresremain in force   New Environmental Stewardship handbooks ...
Cattle and Dairy    Regulation 261/2012 – Producer Organisations (POs) in the dairysector    DEFRA Consultation closed o...
Agricultureal rights of way Giles v Tarry [2012] EWCA Civ 837 (1) Mohit Dutta (2) Amanda Queiroz v Thomas Hayes [2012]  ...
Agricultural tenancy issues Morrison-Low v The Executors of Patterson [2012] CSIH 10 Environmental Stewardship Handbooks...
Rural Professionals Breakfast        Planning update         Keith Lancaster, Solicitor       keith.lancaster@bllaw.co.uk
1.     Removing Ag Tie Restrictions    Rasbridge, Re Cefn Betingau Farm, Sept 2012    Restriction in planning agreement...
1.     Removing Ag Tie Restrictions    General rule:      – Market testing is the indicator of need      – Marketed at lo...
1.     Removing Ag Tie Restrictions    What had been done?      – Marketed Jul 2008 to Sept 2009      – Price reduced ini...
1.     Removing Ag Tie Restrictions    What were the problems and what was required?      – Of the nine comparable proper...
1.     Removing Ag Tie Restrictions    What were the problems and what was required? (cont)      – No advertisements in s...
2.      Agriculture and EIA General rule: EIA requirement bolted onto the planning system Exceptions: include agricultur...
2.        Agriculture and EIA Projects covered by 2006 Regs (subject to exemptions and     thresholds):      – Uncultivat...
2.       Agriculture and EIA Before starting project:     – Apply to Nat Eng for screening decision     – 35 day determin...
2.        Agriculture and EIA Criminal offences include:     –   Carrying out project without screening decision     –   ...
Rural Professionals Breakfast           Tax update         Philip Allen, Associate        philip.allen@bllaw.co.uk
CGT and Entrepreneurs’ Relief Disposal of whole or part of business Contrast disposal of asset of business Russell v HM...
Inheritance TaxAgricultural Property Relief Hanson v HMRC [2012] First-tier Tax Tribunal held no requirement under legis...
Inheritance TaxBusiness Property Relief N V Pawson v HMRC [2012]   – Upper Tax Tribunal has denied BPR on single Furnishe...
Income Tax - relief G Pratt & Sons v HMRC   – Farm drive re-surfacing – income or capital expense?   – It was a repair to...
Income Tax - Farm profit averaging claims Donaghy v HMRC [2012]   – Can’t average a profit against a loss   – Loss must b...
Income Tax – anti-avoidance S10 Finance Act 2012/s127B Income Tax Act 2007   –   Individual or partnership   –   Makes lo...
VAT and Self Storage   More self storage reflects diversification   Exemption ended 1 October 2012   Now standard-rated...
General Anti-Abuse Rule   HMRC and “abusive tax avoidance schemes”   Draft Finance Bill 2013   Closing date for comment...
Annual Residential Property Tax   Finance Bill 2013 contains draft rules   Annual charge – starts w.e.f 1 April 2013   ...
Disgruntled beneficiaries Loose talk costs farms - proprietory estoppel Suggitt v Suggitt [2012]    – Assurance, relianc...
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Blake Lapthorn solicitors' Rural professionals' breakfast briefing - 5 February 2013

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Blake Lapthorn solicitors' Rural team held a Rural professionals' breakfast briefing on the legal issues currently facing the Rural sector on 5 February 2013.

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Transcript of "Blake Lapthorn solicitors' Rural professionals' breakfast briefing - 5 February 2013"

  1. 1. Rural Professionals Breakfast 5 February 2013 Mark Charter, Partner and Head of Rural mark.charter@bllaw.co.uk
  2. 2. "If People have full stomachs they can have the luxury of multiple problems – if you are hungry you only have one problem" Nick Tapp
  3. 3. Committed to reduce form filling/bureaucracy Food self sufficiency CAP reform – there is a role to play for public money tocompensate farmers for environmental benefits Bovine TB is the most pressing health problem I am determined that disease in trees and plants received thesame attention as disease in animals Owen Paterson, Oxford Farming Conference 2013
  4. 4. Outlook Poor crop establishment Rising food prices Increasing concern about disease control CAP reform uncertainty Land supply shortage Rent review uncertainty Other related rural sectors under pressure eg:  Shooting (game bird cost, PAYE for beaters)  Equestrian – increased feed cost
  5. 5. CAP reform: Current system ends on 31 December 2013 Golden ticket or simple carry forward? Irish presidency until end of June 2013 Multi-annual Financial Framework Reforms will not be ready to apply until January 2015 Will need to be transitional arrangements for 2014 Pragmatism to prevail?
  6. 6. Current Ash dieback (chalara fraxinea) preventative measuresremain in force New Environmental Stewardship handbooks for anyscheme commencing on or after 1 January 2013 Revised nitrate vulnerable zone maps come into force on 1January 2013 £15 million Rural Community Renewable Energy Fund tolaunch by March 2013 House of Lords vote on abolition of Agricultural WagesBoard (February/March 2013)
  7. 7. Cattle and Dairy Regulation 261/2012 – Producer Organisations (POs) in the dairysector DEFRA Consultation closed on 21 January 2013 What legal structures will POs adopt? Minimum of 10 members or 6 million litres of raw milk deliveredannually? Pilot badger culls in West Somerset and West Gloucestershirepostponed to Summer 2013 Hampshire and Oxfordshire from 1 January 2013 amongst countiesplaced on annual TB testing January – October 2012 - 31,146 cattle slaughtered - bovine TBrisen by 12% in last year (Farmers Weekly 25 January 2013) Schmallenberg virus
  8. 8. Agricultureal rights of way Giles v Tarry [2012] EWCA Civ 837 (1) Mohit Dutta (2) Amanda Queiroz v Thomas Hayes [2012] EWHC 1727 (ch)
  9. 9. Agricultural tenancy issues Morrison-Low v The Executors of Patterson [2012] CSIH 10 Environmental Stewardship Handbooks 2013/Case B Schedule 3 Agricultural Holdings Act 1986 The Agricultural Holdings (Units of Production) (England) Order 2012 Spencer and another v Secretary of State for Defence [2012] EWCA Civ 1368
  10. 10. Rural Professionals Breakfast Planning update Keith Lancaster, Solicitor keith.lancaster@bllaw.co.uk
  11. 11. 1. Removing Ag Tie Restrictions Rasbridge, Re Cefn Betingau Farm, Sept 2012 Restriction in planning agreement Wales Appn to Lands Chamber (LPA 1925 s84) Ag tie related to only part of the land for sale Highlights: – Onerous nature – Rigorous need for market testing – Onus of proof rests on the applicant
  12. 12. 1. Removing Ag Tie Restrictions General rule: – Market testing is the indicator of need – Marketed at lower value for a period time – No offers indicate no need Little guidance on market testing – Welsh Practice Guidance… – Reasonable period = at least 12 mths – Advertised to relevant potential tenants/buyers – Price/rent reflects the ag tie (70-75% OMV)
  13. 13. 1. Removing Ag Tie Restrictions What had been done? – Marketed Jul 2008 to Sept 2009 – Price reduced initially 28% and by the end 39% – Price estimate based on agent’s 40yrs experience – Price based on 9 comparable properties from agent’s database – Advertised in local press 13 times – Advertised on websites (agents, Rightmove etc) Decision – Application to discharge dismissed – Market testing not sufficiently rigorous to establish lack of demand
  14. 14. 1. Removing Ag Tie Restrictions What were the problems and what was required? – Of the nine comparable properties only one was subject to an ag tie – No detailed objective analysis of the comparable properties, only basic info given – Analysis of an experienced valuer inevitably needed and weight should be given to that expertise – Failure to keep proper records of interest shown (oral, emails or www) – Property should also have been marketed with extra land not subject to ag tie – Failure to offer property for rent
  15. 15. 1. Removing Ag Tie Restrictions What were the problems and what was required? (cont) – No advertisements in specialist farming press – No explicit adjustments made in price to reflect general market movement which should have been distinguished from the ag tie discount element – An ag tie restriction over part was in practice a restriction over the whole Lessons equally applicable to ag ties on planning consents and in England
  16. 16. 2. Agriculture and EIA General rule: EIA requirement bolted onto the planning system Exceptions: include agriculture (where works not “development”) – EIA (Agriculture) (England) (No2) Regs 2006 – Natural England Guidance (NE311) updated – November 2012 following consultation Importance of complying? – Accrual of criminal offences > fines – Accrual of civil sanctions – Compliance is a condition of the Single Payment Scheme (cross compliance) – Also check terms of Envtal Stewardship agreements
  17. 17. 2. Agriculture and EIA Projects covered by 2006 Regs (subject to exemptions and thresholds): – Uncultivated land / semi natural area projects  Aim = improve productivity of land uncultivated for 15 yrs  Chemical enhancements  Physical cultivation  Draining land – Restructuring land holdings  Physical operations  Altering field boundaries  Re-contouring
  18. 18. 2. Agriculture and EIA Before starting project: – Apply to Nat Eng for screening decision – 35 day determination period – If “significant effect on the envt” consent needed Applicant may ask for a scoping opinion of what ES should cover Apply for consent (including ES) Various appeals available
  19. 19. 2. Agriculture and EIA Criminal offences include: – Carrying out project without screening decision – Carrying out project without consent – Contravening notices (stop or remediation) – Contravening conditions of a consent – Knowingly or recklessly providing false or misleading information
  20. 20. Rural Professionals Breakfast Tax update Philip Allen, Associate philip.allen@bllaw.co.uk
  21. 21. CGT and Entrepreneurs’ Relief Disposal of whole or part of business Contrast disposal of asset of business Russell v HMRC [2012] – Only business was land (21h farmed; 6h sold for development) – No post-sale change in continuing business – Fall in profits after sale insufficient – But what could Mr Russell have done? Upturn in property market will raise development opportunities and ER availability more often
  22. 22. Inheritance TaxAgricultural Property Relief Hanson v HMRC [2012] First-tier Tax Tribunal held no requirement under legislation for the land occupied with a farmhouse to be in the same ownership to get relief
  23. 23. Inheritance TaxBusiness Property Relief N V Pawson v HMRC [2012] – Upper Tax Tribunal has denied BPR on single Furnished Holiday Letting – Must be run with view to profit – Degree of involvement in management – Extent of services to holiday makers – Problem: provision of ancillary services just regarded as part of investment management
  24. 24. Income Tax - relief G Pratt & Sons v HMRC – Farm drive re-surfacing – income or capital expense? – It was a repair to existing drive, not renewal
  25. 25. Income Tax - Farm profit averaging claims Donaghy v HMRC [2012] – Can’t average a profit against a loss – Loss must be treated as nil profit – Mr Donaghy’s accountant claimed Human Rights Act 1998 applied: averaging doesn’t solve profit/loss volatility!
  26. 26. Income Tax – anti-avoidance S10 Finance Act 2012/s127B Income Tax Act 2007 – Individual or partnership – Makes loss in property business – That business has a relevant agricultural connection – No property loss relief against general income for agricultural expenses arising in connection with “relevant tax avoidance arrangements”
  27. 27. VAT and Self Storage More self storage reflects diversification Exemption ended 1 October 2012 Now standard-rated Need to identify inputs and apply VAT properly
  28. 28. General Anti-Abuse Rule HMRC and “abusive tax avoidance schemes” Draft Finance Bill 2013 Closing date for comments 6 February 2013 Too little guidance about impact on the “grey” cases Will affect Inheritance Tax despite warnings
  29. 29. Annual Residential Property Tax Finance Bill 2013 contains draft rules Annual charge – starts w.e.f 1 April 2013 High-value UK residential properties ie £2m+ Owned by certain non-natural persons ARPT arises if a company or partnership (or collective investment scheme) meets the “ownership condition” in relation to a “single-dwelling interest” Problems may arise for partnerships with a corporate member £15,000 charge for a relevant £2m-£5m interest Lots of details to check; more draft legislation published 31 January
  30. 30. Disgruntled beneficiaries Loose talk costs farms - proprietory estoppel Suggitt v Suggitt [2012] – Assurance, reliance and detriment – When was your Will (and other documents) last reviewed?
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