Will there be tax increases following succession planning changes for farmers in the Spring?
If you have a farming business, and you're thinking about one day passing it on and keeping it in the family, you may have given a passing thought to the potential tax issues of succession. Well, you may wish to reconsider your succession planning and inheritance tax position before the chancellor's Spring Statement.
It has been hinted at for some time that current legislation, which allows farmers to pass down agricultural business and property to the next generation tax free through the use of Agricultural Property Relief (APR) and Business Property Relief (BPR), is going to be revised.
APR and BPR can currently apply to transfers occurring on death as well as lifetime transfers. This makes them both very valuable reliefs when considering planning for the future.
However, these reliefs may be altered or removed altogether next Spring, if some reports are to be believed. The removal of APR and BPR could mean that passing on your farming business may not be financially viable before death and that the business may need to be broken up to pay for inheritance tax after death.
Considering the financial position that the Covid pandemic brought to the economy, and that's before we even know what a Brexit deal or no-deal will bring, it is becoming more and more likely that wholesale tax changes may be implicated.
Whilst we do not know what the chancellor will announce, it is important to consider your position as early as possible. Last minute planning is usually not the most tax efficient and can lead to higher costs to implement. At Gepps we have a wealth of experience in advising clients on tax efficient succession planning to ensure that family business stays in the family.
If you would like to discuss how the potential changes may affect you, your family and your business, please contact our experienced Private Client team on 01245 228125 or PrivateClientEnq@gepp.co.uk.
This is not legal advice; it is intended to provide information of general interest about current legal issues.