A Practical Guide to Capital Taxes on Farms & Estates

Introduction

This full day in-person seminar will look in depth at the impact of the two major capital taxes, Inheritance Tax and Capital Gains Tax, on farmers and landowners. Consideration will be given to the impact of Brexit and the Agriculture Bill.

The course will not only look at the legislation but will also examine the relevant case law and consider HMRC's current approach to collecting tax from the farming industry.

There will be a focus on the current HMRC target areas including property income versus trading income, occupation and amenity value. Many argue that the beneficial capital taxes on farms and estates keep farm prices high.

A working knowledge of the two taxes will be useful but is not essential.

What You Will Learn

This course will cover the following:

• How IHT and CGT impacts on farmers and landowners and how unprepared the farming industry is for maximising these reliefs
• How forensically to identify, approach and tackle the relevant issues
• How better to negotiate with HMRC and where appropriate the DV
• The farmhouse and Vigne v HMRC [2018] UKUT 357 (TCC) and enhanced livery
• Graham, furnished holiday accommodation and the power of lavish services
• The importance of BPR and ER for development potential
• NPPF2 and the small development opportunity
• The importance of understanding ownership to achieve capital taxes protection
• How the accountancy and tax profession need good agricultural lawyers for understanding ownership for capital taxes protection
• How the agricultural lawyers need strong accounts
• The “Land Capital” Account - the importance for capital taxes
• Development land in the context of capital taxes - NPPF2
• 'Slice of the Action' schemes - CGT protection
• Overage - capital taxes protection
• Succession planning helps set out what the family need
• The importance of the Partnership Agreement and the Wills
• How better to plan and structure your client's affairs to maximise reliefs and minimise tax mitigation
• How to work with other professionals to improve your client's tax position ensuring that binding legal agreements are in place for capital taxes protection
• The importance of accounts working papers and tax return disclosure on capital taxes
• How is the farm owned - identification of partnership property Ham v Bell [2016] EWHC 1791 (Ch)
• What is the intention of how the farm is owned? (The Will and documentation)
• The farmhouse and the RNRB (Residency Nil Rate Band) and £2m limit - the potential for life
• Lifetime gifts to reduce farm values but need for capital taxes protection
• Gifts with Reservation of Benefit - analysis of tax problems
• Buying and selling a farm (also incorporates Capital Allowances)
• Capital taxes protection through evidence of activity and services
• Accounts treatment of the farm changing the ownership of the farm and impact of partnership property (Ham v Bell)
• IHT enquiries and how to avoid them - full disclosure on the IHT400 with strong valuation
• Woodlands - providing full capital taxes protection through commerciality and agricultural use
• Review of the Vigne success in context of BPR and APR
• No clear bright line - the investment line
• Importance of the quality of services for the diversified business in the light of Vigne - impact of storage
• Consideration of Pawson and Ross in relation to Vigne and Graham
• James v James [2018] EWHC 43 (Ch) importance of strong Will file and strong attendance notes
• Larke v Nugus [2000]
• Protecting capital taxes around dispute cases
• The risk of the farm dispute - Ham, Davies, James, Gee and impact on capital taxes
• Capital taxes and the farm business tenancy
• EIS and Seed EIS