The Environmental Land Management Schemes & Tax - Protect Your Client’s Position

Introduction

The focus of this session is the tax compliance and planning on environmental projects. It is very good news that, following the Spring Budget 2023 and 2024, the agricultural property relief (APR) definition is proposed to be extended to include land being controlled under Environmental Land Management Schemes (ELMS) from 2025.

However, all other tax on the environment is subject to a working group post the consultation. There is a practical worry as to what happens to APR and business property relief (BPR) in the meantime or the “gap” until the tax guidance is announced post the working group. For farmland currently being administered on the death of a farmer that is in an environmental scheme there are suggested solutions whilst we await the results.

Such concerns would especially apply to rewilding and other ‘eco-warrior’ projects not falling into ELMS and the income-generating established grant schemes such as land recovery and wetlands projects together with tree planting producing “carbon credits”. Likewise, there is the question of matching expenses with income and whether the credits can be subject to capital gains tax (CGT).

This session will consider how to protect your client’s position whilst the results of the proposal are awaited with regard to APR/BPR claims and indeed all tax compliance and planning around environmental schemes.

We look at the impact of the loss of the Basic Payment Scheme (BPS) together with the negligible value claims for CGT on purchased BPS entitlements.

What You Will Learn

This virtual classroom session will cover the following:

• Planning around Capital Gains Tax (CGT) on carbon credits due to devaluation of land
• Potential routes for relief for someone who had died owning such land in the ‘gap’:
• Claims for APR based on evidence, case law and the pressure being placed on farmers by environmentalists in anticipation of the results of the consultation
• Business property relief (BPR) if appropriate as part of the whole business
• Environmental grants and BPR claims on commerciality of carbon credits
• Negligible value claims on purchased BPS
• Importance of evidence to support APR/BPR claims
• Land valuation under carbon contracts
• The payment of carbon credits up front - the matching of future maintenance costs
• The importance of Accounts disclosure - need to disclose accounting policies
• The need for tax planning before signing the contracts
• The need to update all legal documents - Wills, Partnership Agreements, CFAs etc
• The impact of the Rock Review on tenancies - rejection of 8-year FBT in the Budget and general impact on tenancies
• The pressure placed on the CFA following the Rock Review etc

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.