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. Post the October 2024 Budget, there could be increased IHT and CGT liabilities and some farmers will want to blame advisers! There are so many options and the tax advice has to be tailor made - there is huge scope for error. 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, diversification and key problem areas. With high farm values there have been 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 with backlash on advisers with the loss of 100% APR/BPR other than on the first £1million.

The session will also look at the risks of the current changes to farming and the proposal of “farming for the environment” through ELMs without formal HMRC guidance as of yet.

It is understood that only one third of farming partnerships have Partnership Agreements in place, and the majority are out of date. There is a difference - farmers are focused and listening. There are large tax problems of owning the farm in the Ltd Company, although this is where the R&D relief can be obtained. 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 partnership agreements in terms of both risk and tax. Registration under the Trust Registration Service (TRS) must be considered. There can be a lot of historic confusion over farm ownership. Protection can be achieved through full researched succession planning and strong legal agreements.

What You Will Learn

This live and interactive broadcast will cover the following:

Avoiding the risks and negligence traps

• The need to have increased focus on IHT and CGT liabilities post the Budget 30 October 2024 and planning to protect
• Mehjoo v Harben Barker - the need for specialist farm tax advice due to farm tax complexities, especially with full succession planning needed
• The significance of 'implied terms' for the nature of the professional advice without written agreement - the “retainer” - clarity on instructions
• 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
• Capital allowances and repairs ensuring they tie into succession planning (Pratt, Hopegear, Steadfast and Cairnsmill) - the risk of not identifying capital allowances correctly
• The increasing responsibility of the role of executor regarding a trading farm in the Estate, the need for correct values, possible sale of assets and online CGT return and the increased responsibility of dealing with IHT liabilities
• The importance of having robust legal agreements in place: the Will and risk of intestacy, disputes and loss of tax reliefs - the partnership agreement
• The grazing agreement, the case of Gill, contract farming and the partnership agreement - exploring maximum tax efficiency post the Rock Review and associated risks
• Farmland values: Foster, hope value, the quantum of risk on increased values of development land - warnings on the increased risk in liabilities
• Farm losses - the impact of Naghshineh and removal of 11 year stud farm losses by the simple altering of a BIM - impact on liabilities
• The IHT400 - the importance of the history of the farm and accounts information for evidence, possible rectification of accounts that jeopardise capital taxes
• The re-emergence of Woodlands Relief and heritage property
• The problems of the horse and loss of agricultural status and tax diversification - Cliff and Vigne - but risk extra tax and protection
• Weak contract farming agreements (CFA) - consider farming in hand - Arnander - the CFA under pressure post the Rock Review
• VAT on liveries, partial exemption, artificial separation, links to Vigne (UT success) and need for services - complexity of VAT on farm diversification
• The 'stand alone' limited company and R&D tax opportunities - tax protection, but need to interact with succession planning
• The farmhouse risk of loss of APR - occupation - definition of agriculture - the diary of hours spent
• Farmers retiring - 'retired farmer' and the death certificate - is the tax protection in place around succession planning post 30 October 2024 Budget
• Proactive farm tax planning: - more risk with more potential liabilities
• The aggressive stance by HMRC. The risk of extra tax equals to a PI claim - care with lifetime gifting
• Development - slice of the action and overage - is the tax liability protected?
• All farm storage and the need for services for BPR - the hamper and lavish services to move activity from holding investment to trade - Kingsworthy Meadow Fisheries and Gertrude Tanner on the FHA
• VAT complexities and the supply of land - Rufforth Park - has the operation and implications of VAT been fully analysed as part of succession planning?
• Protecting cottages and let activity with Balfour - the sale of complex lettings
• May, the grain silo case, and Griffiths, the potato storage case, importance of farm capital allowance to reduce liabilities
• Death - What happens to partnership interest and assets? Protection re s 33 PA 1890
• Land Capital Account - the risk of professionals not understanding full implication
• Risk of disputes - Davies v Davies, James v James, Guest, Horsford and Mate - need for quality legal documents, especially partnership agreement - liability protection
• Definition and protection of the beneficial interest in partnership situation
• 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 with Land Registry as tax planning tool for clarity
• Spring Budget 2024 - Change to FHA (Furnished Holiday Accommodation) from 2025 - risk of increased liability, and Gertrude Tanner case on BPR

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.