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Biggest change ‘for a generation’ Farming families should seek professional advice rather than making rash decisions following the Autumn budget, say financial experts. It... Financial advice to ease Budget pain

Biggest change ‘for a generation’

Farming families should seek professional advice rather than making rash decisions following the Autumn budget, say financial experts.

It comes after the government’s decision to abolish 100% agricultural property relief (APR) and impose inheritance tax (IHT) on the value of farming assets above £1m. Anything above this cap will be taxed at 20%.

Industry leaders have described the announcement as a betrayal given government promises ahead of the election that there were no plans to change either APR or business property relief (BPR).

Significant change

Jason Beedell, rural research director at farm business consultants Strutt & Parker, said: “This is the most significant change to the inheritance tax regime for a generation. It will be seen as a major U-turn.”

The government has said the aim is to restrict the generosity of APR and BPR for “the wealthiest estates”, but the £1 million nil rate band, applied after any other general reliefs, will only enable around 40ha (100 acres) to be transferred free of IHT.

“This will really hit working farmers and their families hard,” says Dr Beedell. For an average sized farm (350 acres), the increase in IHT liability could be around £500,000. For a large farm (1,000 acres), the increase could be around £2m.

More certainty

“This comes at a time when farming businesses are facing direct support payments being phased out even faster, extreme weather events and market volatility.”

Oliver Carr, who leads the rural team at Savills in Cambridge, said: “Now that the budget announcements have been made – whatever we may think of them – we can at least move forward with a bit more certainty.

“The changes to APR and BPR mean that proactive succession planning is absolutely vital. Once more detail has been released and the options explored, we will better understand how to help farming business best protect their future.”

Tax benefit

Mr Carr added: “The varying demands on land mean we continue to see a range of purchaser types in the market who have their own reasons for investing – notwithstanding the tax benefit.

“As such, we’re not expecting a rush of land to the market or for values to drop dramatically. Selling farmland generates cash, which has a worse inheritance tax treatment than farmland under both current and new IHT rules.

“Ultimately, it will take a material change in supply and demand dynamics to significantly impact pricing – and only time will tell if that will be the case.”

Bitesize guide outlines ways to recruit good staff

Tips and advice on recruiting and employing people in agriculture are now available in a free online publication.

The 29-page, easy-to-read booklet – ‘Teams – Recruiting and retaining great people in farming and agribusiness; A Bitesize Guide’ highlights key findings from 10 Nuffield Farming Scholar reports.

It is published by Nuffield Farming Scholarships and the Royal Agricultural Society of England (RASE), supported by the Elizabeth Creak Charitable Trust.

The booklet has a series of Talking Points addressing topics such the cost of replacing people, mentoring and coaching, and how to secure a return on investment in training.

Information is complemented by a series of In Practice case studies. Based on findings by Nuffield Scholars, they include advice on successfully interviewing potential new staff and dealing with leavers.

Nuffield Scholar and RASE head of technical development Stephen Briggs said: “Recruiting and retaining great people in farming and agribusiness is a challenge many people will be familiar with.

“This new Bitesize Guide highlights some of the great information gathered and published by Nuffield Scholars as part of their scholarship report – it’s a practical guide which anyone employing or managing people will find useful.”

Contributing scholars have each spent more than eight weeks travelling across the world examining these topics. Th Bitesize Guide pulls together their key thoughts and recommendations.

Rupert Alers-Hankey, director of the Nuffield Farming Scholarships Trust said the guide was a great way to highlight Nuffield report findings and make them more accessible to a wider audience.