Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Agricultural Property Relief in
perspective - a comparison
of asset investment classes
Charles Cowap
Harper Adams Rural
Re...
Assets
compared
Context
The Tax Reliefs
How much shall we spend?
The impact of the reliefs
So what?
Context
• Agricultural Property Relief in the spotlight ……
• Along with feather-bedding CAP subsidies, relief
from rates a...
Market Value
for IHT
• Section 160, IHTA1984
“.. The value at any time of any property shall for
the purposes of this Act ...
AGRICULTURAL
PROPERTY
RELIEF
Relieves Agricultural Value:
Rates:
100% Property owned for 2 yrs
In possession, or
Right to ...
Agricultural
Property,
s115(2)
“.. ‘agricultural property’ means agricultural land
or pasture and includes woodland and an...
Business Property
Relief
BUSINESS
PROPERTY
RELIEF
• IHTA 1984: ss 103-114
• Assets used in a business
• Rate: 100% or 50%
• Minimum ownership 2 yea...
Relevant business property (s105)
property consisting of a business or interest in a business
…….
any unquoted shares in a...
The Key Phrase
“A business or interest in a business …
are not relevant business property if the business …
consists wholl...
Interplay of APR and BPR
APR is claimed first on
Agricultural Value
01
BPR may then be available on
balance of value of el...
How much shall we spend?
Number of entries: 1,087.00
Minimum size (acres) 0.10
Maximum size (acres) 11,105.00
Average size (acres) 94.73
Total area...
Minimum price 3,000.00
Maximum price 45,000,000.00
Average price 1,045,092.87
Total price 1,050,318,335.00
Number of trans...
So let’s say £1
million for 90
to 100 acres
APR
Permutations
Owned and farmed: APR
@ 100%
Owned and contract
farmed: APR @ 100%?
Owned and let: APR at
100% if on or a...
Other
investment
opportunites
Direct trading
Stock Exchange Listed Investments
AIM shares
Cash, bonds etc
FTSE All
Share 2008
to 2018
(April)
FTSE AIM
All Share
2008 to
2018
(April)
So:
Farmland: APR on
Agricultural Value – may be
no IHT to pay
Direct business: BPR on
market value – no IHT to pay
Listed...
Thank you – Q&A
In-house CPD programmes, professional-technical updates,
organisational consultancy, and more:
 cdcowap@gmail.com
 07947...
Upcoming SlideShare
Loading in …5
×

of

Agricultural Property Relief in perspective: a comparison of asset classes Slide 1 Agricultural Property Relief in perspective: a comparison of asset classes Slide 2 Agricultural Property Relief in perspective: a comparison of asset classes Slide 3 Agricultural Property Relief in perspective: a comparison of asset classes Slide 4 Agricultural Property Relief in perspective: a comparison of asset classes Slide 5 Agricultural Property Relief in perspective: a comparison of asset classes Slide 6 Agricultural Property Relief in perspective: a comparison of asset classes Slide 7 Agricultural Property Relief in perspective: a comparison of asset classes Slide 8 Agricultural Property Relief in perspective: a comparison of asset classes Slide 9 Agricultural Property Relief in perspective: a comparison of asset classes Slide 10 Agricultural Property Relief in perspective: a comparison of asset classes Slide 11 Agricultural Property Relief in perspective: a comparison of asset classes Slide 12 Agricultural Property Relief in perspective: a comparison of asset classes Slide 13 Agricultural Property Relief in perspective: a comparison of asset classes Slide 14 Agricultural Property Relief in perspective: a comparison of asset classes Slide 15 Agricultural Property Relief in perspective: a comparison of asset classes Slide 16 Agricultural Property Relief in perspective: a comparison of asset classes Slide 17 Agricultural Property Relief in perspective: a comparison of asset classes Slide 18 Agricultural Property Relief in perspective: a comparison of asset classes Slide 19 Agricultural Property Relief in perspective: a comparison of asset classes Slide 20 Agricultural Property Relief in perspective: a comparison of asset classes Slide 21 Agricultural Property Relief in perspective: a comparison of asset classes Slide 22
Upcoming SlideShare
What to Upload to SlideShare
Next
Download to read offline and view in fullscreen.

0 Likes

Share

Download to read offline

Agricultural Property Relief in perspective: a comparison of asset classes

Download to read offline

A comparison of asset investments in farmland, business assets and shares for Inheritance Tax relief purposes. A presentation at the Harper Adams University Rural Research Conference, 18 April 2018

Related Books

Free with a 30 day trial from Scribd

See all
  • Be the first to like this

Agricultural Property Relief in perspective: a comparison of asset classes

  1. 1. Agricultural Property Relief in perspective - a comparison of asset investment classes Charles Cowap Harper Adams Rural Research Conference 18 April 2018
  2. 2. Assets compared Context The Tax Reliefs How much shall we spend? The impact of the reliefs So what?
  3. 3. Context • Agricultural Property Relief in the spotlight …… • Along with feather-bedding CAP subsidies, relief from rates and red diesel …… • A new 25 year Environment Plan • And a Command Paper, Health and Harmony …..
  4. 4. Market Value for IHT • Section 160, IHTA1984 “.. The value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch if sold in the open market at that time; but that price shall not be assumed to be reduced on the ground that the whole property is to be placed on the market at one and the same time”
  5. 5. AGRICULTURAL PROPERTY RELIEF Relieves Agricultural Value: Rates: 100% Property owned for 2 yrs In possession, or Right to possession in 12 (24) months 50% Property let before 1.9.95 Owned for 7 yrs Occupied for agric. purposes 100% Property let since 1.9.95 Owned for 7 yrs
  6. 6. Agricultural Property, s115(2) “.. ‘agricultural property’ means agricultural land or pasture and includes woodland and any building used in connection with the intensive rearing of livestock or fish if the woodland or building is occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture; and also includes such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property”
  7. 7. Business Property Relief
  8. 8. BUSINESS PROPERTY RELIEF • IHTA 1984: ss 103-114 • Assets used in a business • Rate: 100% or 50% • Minimum ownership 2 years • Important to distinguish Investment Businesses • These are not eligible for Relief • Generally, letting of land and property is regarded as Investment Business • Some investment activity within a conventional business may be eligible for Relief • Farmer • Brander
  9. 9. Relevant business property (s105) property consisting of a business or interest in a business ……. any unquoted shares in a company …….. This includes AIM shares ….
  10. 10. The Key Phrase “A business or interest in a business … are not relevant business property if the business … consists wholly or mainly of … making or holding investments” Section 105(3) IHTA1984
  11. 11. Interplay of APR and BPR APR is claimed first on Agricultural Value 01 BPR may then be available on balance of value of eligible Business Property 02
  12. 12. How much shall we spend?
  13. 13. Number of entries: 1,087.00 Minimum size (acres) 0.10 Maximum size (acres) 11,105.00 Average size (acres) 94.73 Total area (acres) 102,972.62 RICS RAU Farmland Market Survey 2017
  14. 14. Minimum price 3,000.00 Maximum price 45,000,000.00 Average price 1,045,092.87 Total price 1,050,318,335.00 Number of transactions 1,005.00 RICS RAU Farmland Market Survey 2017
  15. 15. So let’s say £1 million for 90 to 100 acres
  16. 16. APR Permutations Owned and farmed: APR @ 100% Owned and contract farmed: APR @ 100%? Owned and let: APR at 100% if on or after 1.9.1995 But only 50% if let before 1.9.1995 And this relief is restricted to Agricultural Value •But BPR may be available on balance if the asset qualifies …..
  17. 17. Other investment opportunites Direct trading Stock Exchange Listed Investments AIM shares Cash, bonds etc
  18. 18. FTSE All Share 2008 to 2018 (April)
  19. 19. FTSE AIM All Share 2008 to 2018 (April)
  20. 20. So: Farmland: APR on Agricultural Value – may be no IHT to pay Direct business: BPR on market value – no IHT to pay Listed shares on Stock Exchange: IHT on Market Value, 40% AIM shares: may be no IHT to pay if qualify for BPR (non-investment businesses) Cash deposits, bonds etc: IHT on Market Value, 40% Wider benefits of farmland/rural investment – • 25 YEP • Health and Harmony Command Paper
  21. 21. Thank you – Q&A
  22. 22. In-house CPD programmes, professional-technical updates, organisational consultancy, and more:  cdcowap@gmail.com  07947 706505 Twitter: @charlescowap Blog: http://charlescowap.wordpress.com/ Slideshare: http://www.slideshare.net/cdcowap Translating new knowledge for rural professional practice

A comparison of asset investments in farmland, business assets and shares for Inheritance Tax relief purposes. A presentation at the Harper Adams University Rural Research Conference, 18 April 2018

Views

Total views

208

On Slideshare

0

From embeds

0

Number of embeds

0

Actions

Downloads

0

Shares

0

Comments

0

Likes

0

×