Nice little earner.... Naff all cost incurred for the money either in most cases, I would say.
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What's the capital value of land in solar?
- Thread starter barleyboy
- Start date
Doing it for the kids
Member
Clive I dont disagree, whilst it’s for public benefit it’s not a public asset.
Sorry but pointless comment. What would the same area cost in Mayfair and in the brambles behind the buildings of an average farm?!
In terms of £/ft2 it sounds like the masts were phenomenal before. Good for those that enjoyed it.
The government want shooting for allowing this though,
Steevo
Member
- Location
- Gloucestershire
I disagree.
If someone wants to place something in a specific location, the value should reflect this.
Next you'll be saying that the house that backs onto the farm should be able to buy the acre of field directly behind their garden for £10,000.
Yes, hold over relief.
Question (I don't know the answer).
Grandad gifts agricultural land to son before solar option is signed. No inheritance tax, and hold over relief is applied (i.e. the capital gain is held on account and recorded by HMRC).
Anyone know what happens in 30 years time when son either dies or gifts to grandchild?
Is the capital gain payable? Or can it be held over again?
I've been advised that this could be a real possibility. Try to write something onto the co tract to try and prevent this, although future legislation could of course override any contractual obligation.
Got to make solar decision this week. Will be on phone to tax accountant. At moment it's looking worthwhile, but only just.
CGT and/or inheritance tax can take big chunks of cash. Buying land away from the farm might be the safetynet asset which could be sold in 30 years time to cover any tax liabilities.
What I don't want to do is commit too much land area, then make my farm a non-viable agricultural unit, then lose Agricultural Property Relief on the two farmhouses. 40% of £1.5 million worth of farmhouses would be a naive mistake.
- Location
- Lincolnshire
Have you been in touch with a specialist accountant for this? If so, could you pm me.
Exfarmer
Member
- Location
- Bury St Edmunds
In reply to the first , I believe Hold over, will carry on while the property is gifted, as many times as you like provided the 7 years passes each time. It will be lost on death but there is no CGT on property passing on at death, when the property is revalued on that day. Currently of course Agricultural land , buildings and to an extent farm houses attract zero IHT .
IHT would most people believe, be levied on land let to a solar company. This value depending on time of death could be very substantial.
Never forget either that death does not always come in the right order, and of course passing to the next generation can have huge issues if there is some future divorce.
Further I note you mention 2 farmhouses, this may give its own issue as the taxman is looking at the issue of unjustifiable attached property
You need some very serious advice
IHT would most people believe, be levied on land let to a solar company. This value depending on time of death could be very substantial.
Never forget either that death does not always come in the right order, and of course passing to the next generation can have huge issues if there is some future divorce.
Further I note you mention 2 farmhouses, this may give its own issue as the taxman is looking at the issue of unjustifiable attached property
You need some very serious advice
Yes, need good advice. Hopefully speaking to tax advisors today.
Don't want a financial cockup, which could negate any profit from the solar.
An interesting threrad, as we are looking into Planning for the future, following us popping our clogs.
One of the points to be discussed will indeed be the 20ac of land leased for Solar since 2015. As a business decision for generating income, it has been great.
The Limited "management" Company setup for admininstering the income has worked well, and one suggestion that has been made was to bring the land into the Ltd Co as well. What advantages this will bring in the future, will have to be discussed.
Originally, it was felt some degree of BPR could be gained and possibly even a touch of APR, as the land is being grazed, but I feel the latter is not likely... Certainly any gain would probably cost more to fight the HMRC for, than it's worth!!
One of the points to be discussed will indeed be the 20ac of land leased for Solar since 2015. As a business decision for generating income, it has been great.
The Limited "management" Company setup for admininstering the income has worked well, and one suggestion that has been made was to bring the land into the Ltd Co as well. What advantages this will bring in the future, will have to be discussed.
Originally, it was felt some degree of BPR could be gained and possibly even a touch of APR, as the land is being grazed, but I feel the latter is not likely... Certainly any gain would probably cost more to fight the HMRC for, than it's worth!!
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wrap the solar income into a new ltd co - don’t let it’s income get into farm accounts as if significant you risk loosing APR on the farm land and houses
sounds like you are doing the right thing talking to a ag tax specialists accountant
Steevo
Member
- Location
- Gloucestershire
Not far wrong at all.
Just looked up a local one - £950 an acre originally, just shy of £1250 an acre from April 23 based the re-valuations.
Yep, did that here.wrap the solar income into a new ltd co - don’t let it’s income get into farm accounts as if significant you risk loosing APR on the farm land and houses
sounds like you are doing the right thing talking to a ag tax specialists accountant
Similiar to rents being paid then...
Latest advice.
Father is in autumn of his life. Gift from father to me while still agricultural. Valuation for inheritance tax is taken at that transfer point whilst still agricultural. Hope he lives 7 years. If he doesn't, then value of land on the gift date is added into inheritance tax calculation (£1m including the £350k primary residence as long as estate is less than £2million
, otherwise you lose the relief on the £350k primary residence, so just have a total of £650 between mum and dad).
Rollover relief takes care of the capital gains tax for now, which would have been due at gifting. However, no Rollover relief for commercial investment property (let solar land), so there would be CGT to pay when I die or pass over to my children. The amount depends on the value of the solar land. If lease is coming towards end of the lease, then the land devalues closer to ag prices.
Lose APR on farmhouses if we stick all our land in solar and don't have a viable farm unit. Can still gift them now from father to me, but 7 years rule would come into play if the land becomes solar in say 3 years, then dad dies in year 4.
Discretionary Trust may he useful to divide income tax to kids, so I haven't too much tax at 40%. I've got a sibling, so if I've used the term "I/me" in this text, then read it as myself and my sibling.
Renewables probably in a ltd company, kept out of farm accounts.
Father is in autumn of his life. Gift from father to me while still agricultural. Valuation for inheritance tax is taken at that transfer point whilst still agricultural. Hope he lives 7 years. If he doesn't, then value of land on the gift date is added into inheritance tax calculation (£1m including the £350k primary residence as long as estate is less than £2million
, otherwise you lose the relief on the £350k primary residence, so just have a total of £650 between mum and dad).Rollover relief takes care of the capital gains tax for now, which would have been due at gifting. However, no Rollover relief for commercial investment property (let solar land), so there would be CGT to pay when I die or pass over to my children. The amount depends on the value of the solar land. If lease is coming towards end of the lease, then the land devalues closer to ag prices.
Lose APR on farmhouses if we stick all our land in solar and don't have a viable farm unit. Can still gift them now from father to me, but 7 years rule would come into play if the land becomes solar in say 3 years, then dad dies in year 4.
Discretionary Trust may he useful to divide income tax to kids, so I haven't too much tax at 40%. I've got a sibling, so if I've used the term "I/me" in this text, then read it as myself and my sibling.
Renewables probably in a ltd company, kept out of farm accounts.
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Exfarmer
Member
- Location
- Bury St Edmunds
do be aware of gift with reservation. Your parents must not take anything from that asset such as portion of rent or any other possible benefit.Latest advice.
Father is in autumn of his life. Gift from father to me while still agricultural. Valuation for inheritance tax is taken at that transfer point whilst still agricultural. Hope he lives 7 years. If he doesn't, then value of land on the gift date is added into inheritance tax calculation (£1m including the £350k primary residence as long as estate is less than £2million
Rollover relief takes care of the capital gains tax for now, which would have been due at gifting. However, no Rollover relief for commercial investment property (let solar land), so there would be CGT to pay when I die or pass over to my children. The amount depends on the value of the solar land. If lease is coming towards end of the lease, then the land devalues closer to ag prices.
Lose APR on farmhouses if we stick all our land in solar and don't have a viable farm unit. Can still gift them now from father to me, but 7 years rule would come into play if the land becomes solar in say 3 years, then dad dies in year 4.
Discretionary Trust may he useful to divide income tax to kids, so I haven't too much tax at 40%. I've got a sibling, so if I've used the term "I/me" in this text, then read it as myself and my sibling.
in a recent case one parent who had gifted an obviously substantial hose was judged not to have gifted at all as he had continued to use the books in the library!
Thanks for this suggestion. Would be no reservation of either income or living in a farmhouse as they live in their own house on town. They've sufficient cash to live on. Presume they could remain taking income from the partnership no matter who owns the land..... Well dad comes to work 364 days a year, so he'll want some share of partnership profits.
Steevo
Member
- Location
- Gloucestershire
Yes.
Interesting comparison you make there because in my experience business rates on commercial property are often about half the cost of the rent.
Latest advice.
Father is in autumn of his life. Gift from father to me while still agricultural. Valuation for inheritance tax is taken at that transfer point whilst still agricultural. Hope he lives 7 years. If he doesn't, then value of land on the gift date is added into inheritance tax calculation (£1m including the £350k primary residence as long as estate is less than £2million
Rollover relief takes care of the capital gains tax for now, which would have been due at gifting. However, no Rollover relief for commercial investment property (let solar land), so there would be CGT to pay when I die or pass over to my children. The amount depends on the value of the solar land. If lease is coming towards end of the lease, then the land devalues closer to ag prices.
Lose APR on farmhouses if we stick all our land in solar and don't have a viable farm unit. Can still gift them now from father to me, but 7 years rule would come into play if the land becomes solar in say 3 years, then dad dies in year 4.
Discretionary Trust may he useful to divide income tax to kids, so I haven't too much tax at 40%. I've got a sibling, so if I've used the term "I/me" in this text, then read it as myself and my sibling.
Renewables probably in a ltd company, kept out of farm accounts.
Latest advice.
Father is in autumn of his life. Gift from father to me while still agricultural. Valuation for inheritance tax is taken at that transfer point whilst still agricultural. Hope he lives 7 years. If he doesn't, then value of land on the gift date is added into inheritance tax calculation (£1m including the £350k primary residence as long as estate is less than £2million
Rollover relief takes care of the capital gains tax for now, which would have been due at gifting. However, no Rollover relief for commercial investment property (let solar land), so there would be CGT to pay when I die or pass over to my children. The amount depends on the value of the solar land. If lease is coming towards end of the lease, then the land devalues closer to ag prices.
Lose APR on farmhouses if we stick all our land in solar and don't have a viable farm unit. Can still gift them now from father to me, but 7 years rule would come into play if the land becomes solar in say 3 years, then dad dies in year 4.
Discretionary Trust may he useful to divide income tax to kids, so I haven't too much tax at 40%. I've got a sibling, so if I've used the term "I/me" in this text, then read it as myself and my sibling.
Renewables probably in a ltd company, kept out of farm accounts.
I have heard of insurance policies to take the
out of the donor surviving 7 yrs. to cover the risk. Obviously depends on their age and health, but found it not too expensive a few years ago to give peace of mind.
- Location
- Lincolnshire
How big before it's worth moving it all offshor?
warksfarmer
Member
Why should that alter the value? Without the land they can’t build the solar farms. So my figures are for the company that owns the panels to buy it off you.
Clearly if we’re talking about a 3rd party buying it off you then you need to use the rent and index linking for probably 50 yrs.
- Location
- Sunny Scotland
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.