Acting for Farmers & Landowners - Tax Risks & Negligence Traps - Live at Your Desk

Introduction

This live and interactive session is designed to give delegates a full overview of the tax risks and negligence traps currently facing the farming sector, with a particular focus on the role of the professional advisor in an ever-changing farming industry and looking at these problems in the context of a farm tax update on a broad range of subjects.

The high achievement of farmland values has increased the quantum of risk and the complexity around acting for farmers and the lack of clarity in some areas can cause problem and debate with HMRC. In this highly practical session delegates will be provided with a summary of the common negligence traps that exist in acting for farmers and landowners with focus on development land. With increased farm values there are attacks from every corner, e.g. ‘stealing siblings’, threats of ‘undue influence’, consideration of testamentary capacity and history of a large number of farm disputes going through court.

The session will also look at the risks of the current changes to farming and the proposal of “farming for the environment” through ELMs.

It is understood that only one third of farming partnerships have Partnership Agreements in place, and the majority are out of date. There are large tax problems of owning the farm in the Ltd Company and the result is that the majority of the UK farming industry trades through partnerships, and thus it is vitally important for the professional advisor to understand the significance of having these agreements in terms of both risk and tax. Registration under the Trust Registration Service must be considered. There can be a lot of historic confusion over farm ownership.

What You Will Learn

This live and interactive broadcast will cover the following:

Avoiding the risks and negligence traps

• Mehjoo v Harben Barker - the need for specialist farm tax advice
• The dangers of 'squabbling siblings' on succession. The significance of 'implied terms' for the nature of the professional advice without written agreement - the “retainer”
• Capital allowances and repairs ensuring they tie into succession planning (Pratt, Hopegear, Steadfast and Cairnsmill) - the risk of not identifying capital allowances correctly
• A mix of advisors and the need for a clear definition of roles: Memorandum of understanding - clarity of who is responsible for the separate elements of tax advice
• The increasing responsibility of the role of executor regarding a trading farm, the need for correct values, possible sale of assets and online CGT return
• The importance of having robust legal agreements in place: the Will and risk of intestacy, disputes and loss of tax reliefs
• The grazing agreement, the case of Gill, contract farming and the partnership agreement - exploring maximum tax efficiency post the Rock Review and the HMRC rejection of the 8 year FBT
• Farmland values: Foster, hope value, the quantum of risk on increased values of development land - warnings
• Farm losses - the impact of Naghshineh and change of 11 year stud farm losses by the simple altering of a BIM
• The IHT400 - the importance of the history of the farm and Accounts information for evidence, possible rectification of Accounts that jeopardise capital taxes
• The profitability of woodland and sale of carbon credits - taxation deferred Budget 2024
• The problems of the horse and loss of agricultural status and tax diversification - Cliff and Vigne - protecting the tax position
• Weak contract farming agreements (CFA) - consider farming in hand - Arnander - the CFA under pressure post the Rock Review
• Weak v strong grazing agreements - take back in hand (McCall and Gill)
• VAT on liveries, partial exemption, artificial separation, links to Vigne (UT success) and need for services
• The IHT and CGT weaknesses of the FBT - need to identify incorrect FBTs and other leases. Rock Review - rejection of 8 year FBT
• The 'stand alone' company and R&D tax opportunities
• The farmhouse risk - occupation - the diary of hours spent
• Farmers retiring - 'retired farmer' and the death certificate - is the tax planning in place
• Proactive farm tax planning: but the risk of 'pushing the client' - balance
• The aggressive stance by HMRC. The risk extra tax equals a PI claim - review of lifetime gifting
• Drop of BADR to £1 million - impact of the rollover buyer - maximisation
• Johnson and the non-monetary value
• Development - slice of the action and overage - is the tax protected?
• Caravan storage and the need for services - the hamper and lavish services to move activity from holding investment to trade
• VAT complexities and the supply of land - Rufforth Park - has the VAT been fully analysed?
• Impact of basis period reform NOW - stock valuation
• Protecting cottages and let activity with Balfour - the sale of complex lettings
• The risk of post transactional tax planning
• May, the grain silo case, and Griffiths, the potato storage case, importance of farm capital allowance
• AIA at £1 million - understanding full expensing

Partnership Agreements

• The importance of farming partnership agreements with increased farm values and farming family disputes
• Partnership agreements - the problems of weak drafting 'per Accounts' - Ham v Ham - fair value
• Protection of capital and income rights
• Link to Wills and other legal agreements, e.g. LPAs (Horsford)
• Assets used in the partnership - 100% BPR as opposed to 50% BPR
• 'In or Out' of the balance sheet for partnership property. Registration of Trust for property held in partnership (TRS)
• Death - What happens to partnership interest and assets? Protection re s 33 PA 1890
• Land Capital Account - the risk of not understanding
• The drawbacks of incorporation and ownership - ATED, Minority shareholdings and APR but R&D and super-deduction
• Disputes - Davies v Davies, James v James, Guest, Horsford and Mate - need for quality legal documents, especially partnership agreement
• Definition and protection of the beneficial interest
• Ham v Bell - the impact of the Accounts as evidence, rectification of incorrect Accounts, the importance of the Will
• Protection through identifying potential conflicts of interest
• Maurice and Shirley Bell - the risk of loss of rollover relief, is it partnership property?
• Protection through first registration of land as tax planning tool
• Budget 2024 - APR from 2025 but big risks in the gap
• Budget 2024 - Change to FHA (Furnished Holiday Accommodation) from 2025 - risk of not planning

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.