Solar panel field and APR

[jed]

Quick question as things stand at the moment if we had a field of solar panels would we lose our Agricultural property relief on the ground ?
If so whats the best solution would we have to put the ground into a limited company so we could claim Business propert relief?

 

[steveR]

I was advised to go Ltd Co back in 2015, think most farmers do this.

Pondering on the best options for Planning. Waiting on our present Leaders to come up with their latest ideas, then book an appointment with Accountant as a starting point. I wondered if the land with Solar on it, could be "transferred" to the Ltd Co.

 

[Exfarmer]

Quick question as things stand at the moment if we had a field of solar panels would we lose our Agricultural property relief on the ground ?
If so whats the best solution would we have to put the ground into a limited company so we could claim Business propert relief?

I am afraid that is correct. The only issue is if you are putting it into a company I am far from certain that companies of this sort do attract IHT relief. The shares of course can be passed on under the 7 year rule of course. I would seek very serious advice, with the caveat that any reliefs can be taken away at any point by the government.

 

[curlietailz]

The sentence. Any reliefs can be taken away at any time by the Govt is the most important
A solar scheme is for 30+ years
Who knows what the rules will be then

 

[Hill Ground]

How does the farming of sheep under them effect this?

I always assumed the main reason the sheep where there was to keep it agricultural, as can't see it really stacking up farming them under there?!

 

[steveR]

How does the farming of sheep under them effect this?

I always assumed the main reason the sheep where there was to keep it agricultural, as can't see it really stacking up farming them under there?!

HMRC do not consider it to be Ag. however DEFRA can and do... sometimes.

As an aside, Sheep thrive under panels. But do try and integrate a sheep handling system into the PV build, and if a massive site, maybe some internal fencing be allowed.

 

[Exfarmer]

How does the farming of sheep under them effect this?

I always assumed the main reason the sheep where there was to keep it agricultural, as can't see it really stacking up farming them under there?!

Sheep can certainly be grazed under them, you cannot expect the grass to grow so well of course but the panels will at max extract 20% of the light so there is still plenty for growth and I suspect the sheep will appreciate the shelter at times.
Rather like the oversize farmhouse issue if the majority of the income is from the rent of the panels, I do not believe that HMRC would accept it for agricultural property relief.
The problem is of course that they make the rules as they see things, if you want to disagree after someone dies, fighting them in the courts will probably be dearer than paying the tax.

 

[Exfarmer]

HMRC do not consider it to be Ag. however DEFRA can and do... sometimes.

As an aside, Sheep thrive under panels. But try and integrate a sheep handling system into the PV build, and if a massive site, maybe some internal fencing be allowed.

our posts crossed , I have heard that rounding them up can be an issue though

 

[teslacoils]

How does the farming of sheep under them effect this?

I always assumed the main reason the sheep where there was to keep it agricultural, as can't see it really stacking up farming them under there?!

The reasons for grazing are multiple. Site maintaining. Continued food production. Enhanced viability of underlying farm businesses. Attracting new entrants etc.

As for the tax, wrap it in a ltd or move it offshore.

 

[Exfarmer]

The reasons for grazing are multiple. Site maintaining. Continued food production. Enhanced viability of underlying farm businesses. Attracting new entrants etc.

As for the tax, wrap it in a ltd or move it offshore.

moving it off shore does nothing for the IHT which was I think the original issue

 

[Lazy Sod]

With sheep undergrazing, do panels ever get put up on longer legs to improve grass growth?

 

[steveR]

our posts crossed , I have heard that rounding them up can be an issue though

Yep! We have found 3-4 really good dogs are great. We have no dogs, so rely on electric fence funnels....

 

[steveR]

With sheep undergrazing, do panels ever get put up on longer legs to improve grass growth?

Doubtful. There has been some scale scale setups using vertical mounts. Not sure longer legs would help that much?

I always wish ours were wider apart, and even offered more land, still based on an ouput payment, as opposed to area. The developer would not entertain it.

 

[teslacoils]

moving it off shore does nothing for the IHT which was I think the original issue

Half decent planning avoids iht.

 

[Lazy Sod]

Doubtful. There has been some scale scale setups using vertical mounts. Not sure longer legs would help that much?

I always wish ours were wider apart, and even offered more land, still based on an ouput payment, as opposed to area. The developer would not entertain it.

What would have cost them? just a bit more cable that connects up the rows. Seems unreansable to me.

 

[Exfarmer]

What would have cost them? just a bit more cable that connects up the rows. Seems unreansable to me.

It would of course mean beefier metalwork as the wind pressure would be higher. Not sure how much. It also complicates cleaning to be raised. The equipment is certainly avalable as it is commonly used for car parks etc

 

[Y Fan Wen]

The reasons for grazing are multiple. Site maintaining. Continued food production. Enhanced viability of underlying farm businesses. Attracting new entrants etc.

As for the tax, wrap it in a ltd or move it offshore.

York University research shows importance of measuring solar farm biodiversity

A new York University study has shown that investment in solar could boost UK biodiversity - if consistent evaluation metrics are created.

www.solarpowerportal.co.uk

 

[steveR]

What would have cost them? just a bit more cable that connects up the rows. Seems unreansable to me.

Some of the design decisions were odd I have to say, quite counter intuitive really.

 

[Grass And Grain]

Quick question as things stand at the moment if we had a field of solar panels would we lose our Agricultural property relief on the ground ?
If so whats the best solution would we have to put the ground into a limited company so we could claim Business propert relief?

Presumably you mean letting the field to a solar developer? In which case the land would be classed as an investment asset, and would come into your IHT calculation. Let solar might be worth ballpark £20-25k/acre.

However, Balfour case.

If you've got a large farm/ trading business, and that trading business is over 50% of your profit, turnover and capital value (needs to pass all three tests), then you can get IHT relief on the whole of your property.

Be aware that if you can't get IHT relief, and you gift land to next generation and hope to live 7 years, then there isn't any IHT. However, as it's not a trading asset you can't get CGT holdover relief, so there would be CGT to pay. 20%???

There are ways and means by using pension schemes or trusts. Each trust has its own IHT threshold relief of £325k. My memory has gone a bit hazy on trusts and owning it in a Ltd, but there's something about paying 6% IHT every 10 year.

Also remember let solar is a depreciating asset. Value at year 25 of a 30 year lease (with a temporary planning permission) might be lower than it was in year 1.

 

[Grass And Grain]

Presumably you mean letting the field to a solar developer? In which case the land would be classed as an investment asset, and would come into your IHT calculation. Let solar might be worth ballpark £20-25k/acre.

However, Balfour case.

If you've got a large farm/ trading business, and that trading business is over 50% of your profit, turnover and capital value (needs to pass all three tests), then you can get IHT relief on the whole of your property.

Be aware that if you can't get IHT relief, and you gift land to next generation and hope to live 7 years, then there isn't any IHT. However, as it's not a trading asset you can't get CGT holdover relief, so there would be CGT to pay. 20%???

There are ways and means by using pension schemes or trusts. Each trust has its own IHT threshold relief of £325k. My memory has gone a bit hazy on trusts and owning it in a Ltd, but there's something about paying 6% IHT every 10 year.

Also remember let solar is a depreciating asset. Value at year 25 of a 30 year lease (with a temporary planning permission) might be lower than it was in year 1.

If it's only say 10 acres with a built out value of £250k, then if you can keep your total married couple's assets below £650k (assets which attract IHT), then you'd be OK and wouldn't have any IHT to pay anyway.