Presentation for Lexisnexis in Exeter on 21 September 2011

1. Tax Planning for Landed Estates John Endacott Tax Partner

2. Field of play Business or pleasure, sir Tax changes Case law developments All about structuring activities

3. Wealth taxes debate 50% tax rate Mansion tax Wealth tax Large property holdings? Trusts?

4. Business property relief - background Business or interest in a business No relief where business wholly or mainly making or holding investments No relief for investment businesses Hybrid business – all or nothing test

6. Points to look at Bring farms back in hand? Share farming Farmer/Balfour – 8 year period considered Presentation of accounts Planning and s 106 issues Keep your options open

8. Sporting rightsShooting Fishing Business or pleasure?

9. BPR – Story so far No relief where only activity is rental income Good record keeping and accountancy advice required No single factor is determinative Consider restructuring Can Balfour make it worse?

10. Farmhouses – agricultural property relief IHTA 1984, s 115(3) “Ancillary” “Character appropriate” Antrobus 1 & 2 Starke, Dixon, Higginson, Rosser & McKenna

11. Farmhouses – Golding case 16.29 acres Farmed since 1945 3 bedrooms (no electric)/downstairs bathroom “Poor state of repair”/“dilapidated” Farmhouse as not good enough to be a domestic residence

14. Furnished holiday lettings – trading? Occupation on site Services provided Case law HMRC guidance Losses Business property relief

15. Furnished holiday lettings – day count tests 105/210 days from April 2012 Averaging Period of grace Genuine intention to let/commercial Watch planning restrictions

16. Furnished holiday lettings – capital allowances Dwelling houses Curtilage of properties Integral features CAA 2001, s 13B

17. Furnished holiday lettings – ring-fenced losses Restriction of losses Only other furnished holiday lettings Plan expenditure carefully Losses condoc

18. Don’t shoot the messenger Is it a separate trading activity? Property trading or exempt (woodlands) income? Be careful over private expenditure Commercial activity – use of losses Benefit in kind issues for farming/estate companies

21. Shooting - VAT issues Is it a commercial activity? Standard and zero-rated supplies Barter transactions VAT registration threshold Business splitting Private expenditure

22. Shooting at the courts Rt Hon Lord Fisher R F Bailey (t/a Llancillo Hall Farm) J O Williams Thimbleby Farms Ltd E G Harrison

23. VAT – disaggregation of businesses Forster case B&B and farm Were the two businesses sufficiently at arm’s length? HMRC direction overturned

24. Summary of points More property taxation coming Carefully structure activities Think about the activities Be consistent Better news on farmhouses Long term planning essential

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