Major tax break for farmers ‘unlikely to be in chancellor’s line of fire’
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A major tax break for farmers is unlikely to be on the chancellor’s chopping board in Monday’s budget, experts believe.
Financial advice firm NFU Mutual said fears inheritance tax relief around farm land and buildings could be axed aren’t likely to become a reality, but warned other possible changes to inheritance tax could mean family finances and succession plans will need urgent updating.
Meanwhile, the National Farmers’ Union (NFU) has called on Philip Hammond to introduce changes to ensure British farm businesses can be productive, profitable and progressive post-Brexit when he announces the budget on October 29.
It is calling for measures including reform of capital allowances, tax relief on farm infrastructure depreciation, a simplified and expanded Enhanced Capital Allowances to allow adopting of technology on farm, cutting red tape for diversified farm businesses, ensuring the roll-out of superfast broadband to all farmers along with mobile phone coverage, research and development tax relief for all buildings, and allowing farmers to set aside pre-tax profits for future use in the business.
NFU president Minette Batters said: “It’s vital the chancellor takes onboard the measures the NFU has put forward ahead of the budget and how these can contribute to a thriving farming sector.”
The outcome of an official review of inheritance tax by the Office of Tax Simplification (OTS), which will look at inheritance and all its reliefs including Agricultural Property Relief, which can allow qualifying agricultural land and buildings to be passed through generations without triggering inheritance tax bills, is expected soon.
NFU Mutual chartered financial planner Sean McCann warned while some inheritance tax elements would be safe, farmers could be hit by other changes and possible adjustments to tax relief on pensions in the budget.
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“Agricultural Property Relief (APR) and Business Property Relief (BPR) are unlikely to be in the chancellor’s crosshairs. Both APR and BPR are generally considered to work well – ensuring many family businesses can be passed down through generations without being hit by punitive tax charges,” he said.
Inheritance tax receipts hit a record £5.2bn in the 2017-18 tax year.