What's the capital value of land in solar?

[Exfarmer]

I thought HMRC would struggle to refuse APR on a historic farmhouse even if the value of the farmhouse is not commensurate with the size of the the holding as long as a proportion was being actively farmed. I didn't think the viability of the unit mattered but I could certainly be wrong.

I think, but may very definitely be wrong, they are looking where people are using the farm as a hobby and gaining a fair chunk elsewhere. But in the net are being scooped some who while the house may be worth 2 Million do not spend much on the upkeep. I think only a few genuine farmers have been cau8ght but HMRC are certainly looking

 

[Steevo]

I thought HMRC would struggle to refuse APR on a historic farmhouse even if the value of the farmhouse is not commensurate with the size of the the holding as long as a proportion was being actively farmed. I didn't think the viability of the unit mattered but I could certainly be wrong.

"HMRC will investigate two additional aspects to determine whether the farmhouse is of a ‘character appropriate’ to the agriculture land. Firstly, they will look at what agricultural land is taken into consideration. The agricultural land in question must be the dominant feature, meaning that there has to be a link between the land and the farmhouse, namely, common occupation between the two. Secondly, HMRC will consider whether the house is proportionate in size and nature to the requirements of the farming activities conducted on the agriculture land, taking into account the size, layout, content and style of the farmhouse when taken with the associated farmland and buildings. Other factors that will be considered are the value of the house in relation to the profitability of the land, and whether the house is dominant or ancillary to the land itself."

Your farmhouse and inheritance tax - Birkett Long Solicitors

In recent years, claims for Agricultural Property Relief (APR) on farmhouses have come under scrutiny by HMRC as house prices have risen, particularly in the...

www.birkettlong.co.uk

 

[barleyboy]

If there were to be 40% inheritance tax (valued now at ag values, say £10k/acre), and 20%????? CGT to pay at some point in the future, that's £6k/acre the solar needs to cover before you're in profit. Some might not have the 40% depending on circumstances.

If solar paid £1,000/acre, less 40% income tax, that's £600/acre, index linked so that £1,000 would be going up, but still towards 10 years of rent to covert the tax.

^^^^Upward only rent increases by inflation is your friend, because by year 10 you'll have grossed £11,480, £6,888 after income tax, so £88/acre left over after leaving the £6k to pay the taxes.

Father living 7 years would help massively.

By year 20, at 2.5% inflation you're looking at over £1,600/acre, and over £2,000/acre by year 30.

Even if IHT were payable, it's just about feasible, but isn't a get rich quick scheme. No IHT due for 30 years and it's better than farming.

 

[Highashgrange]

Great way to raise capital... pay off a loan etc etc.

Wonder what the tax implication will be though?

There are no reliefs available as the land becomes commercial although depends on everybody’s individual business setup of course.