What to do next?
And here lies the first challenge. David’s successors cannot sell some land to pay this tax, as has been suggested in some circles since the Budget. They could look to surrender part of the tenancy to raise capital, however this is unlikely to raise enough to make it worthwhile. The second challenge is that tenancies are difficult to plan around, in traditional estate planning terms. Some farming businesses are undertaking estate planning which focuses on utilising the £1m cap for APR and BPR of both a husband and wife, to ensure they fully relieve £2m of qualifying assets.
This is likely to be challenging in David’s case, given that it’s unlikely that David would be able to share ownership of the tenancy with a spouse, without disturbing the tenancy itself. Many landowners are looking at passing assets down a generation via lifetime gifting. But this is also difficult with a tenancy, compared to assets owned outright, as passing the tenancy down would typically require a succession, which is likely to have wider implications on the tenancy itself.
We’ve been discussing many of these cases with affected clients and working hard to support them ahead of the changes next year. I suspect our land agent friends will be busy in the meantime providing valuations of tenancies to support estate planning. We’re here to help with advice and support for both your business and personal finances. So, if you’re facing this issue and unsure what to do next then please call Nick or one of the team on 0330 058 6559 or email hello@scruttonbland.co.uk
AGRICULTURE AND FARMING | SCRUTTON BLAND | 1 3
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