COMMERCIAL PROPERTY
Succession Planning for farmers and business owners
by Tom Chiffers , Associate Solicitor at Mogers Drewett
As land and property values continue to rise , so does the importance of considering inheritance tax for farmers and business owners .
Although HM Revenue and Customs has not changed the reliefs on offer , they are tightening the rules associated with those reliefs . It should no longer be assumed that the estate of a farmer will automatically receive agricultural property relief ( APR ) or business property relief ( BPR ).
In particular if you are a retired or semi-retired farmer or contract out your farming business but have some development value in your land or have a valuable farmhouse ; and continue to own your land , buildings and / or farmhouse , then inheritance tax may be an issue for you .
Agricultural property relief ( APR ) is a relief from inheritance tax . The relief is given against the ‘ agricultural value ’ of any ‘ agricultural property ’ on death or lifetime gifts , so long as certain conditions are met . Agricultural property includes agricultural land or pasture ; buildings used in connection with the land or pasture ; and property occupied with the land or pasture so long as they are of a character appropriate to the land or pasture .
The agricultural value is not necessarily the open market value of the land or buildings and will not include , for example , any development value . The relief will only apply if either the agricultural property had been occupied and used by the deceased for the purposes of agriculture throughout the two years before their death , or owned by the deceased throughout the seven years before their death but occupied by another for the purposes of agriculture for that period .
Business property relief ( BPR ) is also a relief from inheritance tax . The relief is available only to a business that is wholly or mainly carried on for gain and not for holding or managing investments . Renting land and property is considered to be holding or managing investments . Unlike APR , the relief is given against the full market value of ‘ relevant property ’ at either 100 % or 50 %.
To qualify the relevant property must have been owned by the deceased throughout the two year period prior to their death . When relevant property has been passed to a surviving spouse on death , that spouse will automatically be credited with the ownership period of the deceased spouse . The reliefs available against inheritance tax can offer a significant saving . However , it is relatively easy to fall foul of
BATH QUAYS BRIDGE GETS GREEN LIGHT
Plans to build Bath Quays Bridge have been granted planning consent . This is the next stage of the development of Bath Quays , a new central Business District at the heart of the city centre .
Bath & North East Somerset Council has been successful in getting funding for the project from the Cycle City Ambition Fund as the bridge will provide both cyclists and pedestrians a new crossing point between proposed development sites on Bath Quays North and Bath Quays South . It will also enhance connectivity between the riverside and Bath city centre by providing an alternative crossing point to Midland Bridge and Churchill Bridge and the busy A36 / Lower Bristol Road .
The granting of planning consent is
a significant moment for the city as the Bath Quays Bridge represents the first new crossing of the River Avon for over 100 years .
Councillor Patrick Anketell-Jones ( Conservative , Lansdown ), Cabinet Member for Economic Development , said : “ The new Bath Quays Bridge across the river represents an important link in the Council ’ s ambition to create jobs and opportunities for local people . As part of the wider riverside regeneration , the bridge will play a key role in connecting the city centre to the north and with the existing and future communities to the south and west .”
The bridge design was selected via an international design competition , commissioned by the Council in 2015 . Six short-listed designs were evaluated by a panel of experts and exhibited at the Council ’ s One Stop Shop and online , with visitors invited to vote for their favourite . Following the exhibition , the panel evaluated the designs and selected Paris based engineering and architectural consultancy Marc Mimram ’ s ‘ Between History and Modernity ’ bridge as the winning design . The winning design was also the public ’ s favourite . the conditions associated with those reliefs . If you wish to satisfy the conditions , this could mean integrating yourself back into the day to day running of the business . If that is not possible then you should consider handing over the business – and perhaps your home – to the next generation .
For more info : www . md-solicitors . co . uk
@ mogersdrewett
Following the design competition and selection the winning team further developed the bridge plans which were shared with the public in September 2016 .
Now that planning permission has been granted work is expected to begin this year with the bridge completed by Spring 2018 . For more information visit : www . bathnes . gov . uk / BathQuaysBridgePlans
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32 THE BUSINESS EXCHANGE 2017