Farm APR & BPR for Private Client Lawyers - Advanced Aspects

Introduction

Farms are historically lacking in full legal protection and documentation.

The private client lawyer has a big role to play pre and post death to try and ensure all the legal issues are resolved.

Updated partnership agreements, wills, together with trading arrangements and dispute protection whilst considering maximum Agricultural Property Relief (‘APR’) and Business Property Relief (‘BPR’).

Farm values are high and with Rachel Reeves’ move to 50% APR and BPR after the original £1million allowance at 100% plus the new transferable allowance, the IHT liability risk is high.

It is essential for the private client lawyer to think about APR/BPR maximisation and protection with all the legal work they undertake.

The will drafting and partnership agreement drafting need a fully integrated understanding of APR and BPR protection.

There must be a full understanding of what is and what is not agriculture for APR plus what is and what is not trading for BPR.

The basic understanding is important for the advanced aspects of planning.

What You Will Learn

This course will cover the following:

• Awaiting working party on farming for the environment - fight hard!
• The complexity of farm valuations for probate - the need for early quality instructions and understanding of ownership for APR/BPR calculations. The importance of hope value
• The partnership agreement - the need for clarity on ownership - partnership and non-partnership for identifying 100% allowability
• APR and BPR as tools to help with farm survival as well as farm development
• The irony of development projects for farm survival - the risk of hope value for BPR
• The new transferable £1million for 100% APR/BPR - clarity of 100% qualification and complex calculations
• The calculation of the IHT liability - the ‘spreadsheet of range’ of liability depending on marginal areas of APR and BPR
• Lifetime transfers - the recording and the interaction
• The risk of 0% BPR - areas potentially not qualifying as a trade following the tribunals, e.g. wedding barn, fishing, furnished holiday accommodation. Collection of evidence to prove BPR qualification
• The disputes and potential disputes - concern over negative impact on BPR and APR
• Understanding the legal weaknesses of the farm trading operation - putting right legal documents moving forward, emphasis on historic APR/BPR claims
• Considering marriage breakdown, e.g. the Merryman case - the need to ensure the farm housekeeping is in place, e.g. meetings, signed accounts and good documentation
• The power of the private client lawyer - ensuring the other professionals are up to standard
• The need for planning APR & BPR maximisation - and to ensure it is followed through on probate
• Farm tenancies - maximising 100% APR where possible and consideration of moving to trade for BPR as appropriate
• Complex calculations of impact on core IHT liability of changes to structures and trading method