Renting out land and potentially losing inheritance tax relief.

[Oilseed]

I understand Labour could abolish inheritance tax on Let land. Is anybody taking any contingency measures on short term renting out of land for Potatoes or short term grazing lets etc?

 

[WillYorkshire]

I understand Labour could abolish inheritance tax on Let land. Is anybody taking any contingency measures on short term renting out of land for Potatoes or short term grazing lets etc?

Don't rent it out?

 

[Brisel]

Hmm. I would not recommend taking speculative measures before they have got into power AND made these changes. Don't let the tax tail wag the business dog.

Grazing licences are quite different from a spud let. You are only renting out the grass growth, not the land itself and you still have management control through fencing etc. Of course you pay the grazier to spread the fertiliser or do it yourself... Naturally, you have a CAAV grazing licence in place that spells everything out, don't you?

A seasonal "let" where you hand over the land ploughed or otherwise means you don't have management control of that crop unless you construct a contract farming agreement where you "own" the crop and pay for the materials and operations or at least have an unpaid invoice showing that, and you sell the standing crop to them.

As always, the devil is in the detail and you should consult a professional advisor, not trust what some dodgy dude told you on the Internet

 

[Nearly]

There will be an industry pop up to generate paperwork to make sure the boxes are ticked.
Too many mp's and business folk are invested in land to let all advantages disappear.

 

[Bobby Spray]

I'm in the position of being caught in that net but as Brisel says - I'd wait until they actually change the law before acting .

 

[Brisel]

Remember that FBT let land is eligible for Business Property Relief. Removing BPR would upset many more folk. Beware of losing relief on the farmhouse if you fail the "active farmer" test. See the Antrobus, McKenna and Balfour test cases for details.

 

[Brisel]

There will be an industry pop up to generate paperwork to make sure the boxes are ticked.
Too many mp's and business folk are invested in land to let all advantages disappear.

How many Labour MPs have farms? A lot less than the Tories do.

"Unearned" income e.g. rents has always been in the firing line by the taxman, hence the screws being turned on buy-to-lets. Don't shoot the messenger here - I'm well aware that a lot of property is bought with post tax income. Mine included.

 

[teslacoils]

Could.

There would almost inevitably be a period of time to get things in order.

 

[serf]

Could.

There would almost inevitably be a period of time to get things in order.

Why would they do that , they would lose out on the windfall then.

They're more likely to go after assets in retrospect ( backwards) to stop ppl manoeuvring around liabilities.

Your dealing with green eyed vengefull socialists this time , not Blair style " labour"

 

[teslacoils]

They would have to get it passed, and then through a myriad of potential challenges.

The PLP still holds the yoke, and thats full of Islington-dwelling neo-socialists. Its not a red-flagged draped mass carrying burning brands.

 

[Oilseed]

Don't let the tax tail wag the business dog.

I like this saying, but in this instance the tax tail could be many times greater than the business dog.

 

[serf]

They would have to get it passed, and then through a myriad of potential challenges.

The PLP still holds the yoke, and thats full of Islington-dwelling neo-socialists. Its not a red-flagged draped mass carrying burning brands.

They could have an "emergency budget " on 8th July and change all thresholds so ppl are cornered from manoeuvring for IHT CGT BPR ect , who can stop them doing that

 

[Nearly]

Say for cgt etc, what rate will it be charged at on say a sale Dec 23 or Jan 24.
Does it go on the cgt rate at the time of completion or the cgt rate April 5th 2024 or 2025?
I wish I was asking for a friend.

 

[Brisel]

I like this saying, but in this instance the tax tail could be many times greater than the business dog.

Indeed. It has been one of the questions raised every time we change government. Britain is the only country to tax death as well as tax us to death. IHT raises several billion £ for the Treasury each year.

Socialism relies on other people's money. Odd how the Tories have shifted Left and Blair's New Labour were more Conservative! I'm not sure just how "tax the rich" the current Opposition is. Lots of millionaires in the Shadow Cabinet, just as Blair had ex Etonians in his.

The probable change of government 4th July does mean new taxes and moving goalposts. Maybe is would be best to appear as though you are trading and taking some trading risk? CFAs have been hard to challenge by the Exchequer in the past.

 

[Salopian_Will]

Remember that FBT let land is eligible for Business Property Relief. Removing BPR would upset many more folk. Beware of losing relief on the farmhouse if you fail the "active farmer" test. See the Antrobus, McKenna and Balfour test cases for details.

I don't think let land does qualify for BPR. Only APR.

The TFA have dropped a complete bollock on this one. Rather than advocating the benefits of the landlord tenant system, including APR relief and thus making landowners at ease in continuing to let land, they have concentrated on dividing landowners and tenants and in effect make it very difficult for any landowner to grant a new tenancy.

 

[Devil's advocate]

How many Labour MPs have farms? A lot less than the Tories do.

"Unearned" income e.g. rents has always been in the firing line by the taxman, hence the screws being turned on buy-to-lets. Don't shoot the messenger here - I'm well aware that a lot of property is bought with post tax income. Mine included.

Leeds council can't afford to pay tax on their buy to lets & they have some of the poorest housing stock in the country.

 

[chaffcutter]

CGT applies on the date of completion.

 

[Brisel]

I don't think let land does qualify for BPR. Only APR.

The TFA have dropped a complete bollock on this one. Rather than advocating the benefits of the landlord tenant system, including APR relief and thus making landowners at ease in continuing to let land, they have concentrated on dividing landowners and tenants and in effect make it very difficult for any landowner to grant a new tenancy.

You are right. My bad. Let land is eligible for APR, not BPR. BPR is available on assets used in trading, subject to Ts & Cs. I phoned a friend on that one.

I will edit my earlier post.

 

[ISCO]

CGT applies on the date of completion.

Date of exchange sets CGT year.

 

[B R C]

How does the ‘active’ farmer test work, I mean can you rent the farm out for 20 years and then farm it in hand for a couple of years before you pop your clogs(of course the latter is not exactly predictable!)?