Thomas Scott Seating Celebrating 96 years in business 1924-2020


Brooks Leney are one of the main AMC agents for East Anglia covering Suffolk, Essex, Norfolk and Cam- bridgeshire.


For a confidential discussion about your business borrowing needs please contact:


CHRIS LENEY


07717 274413 / cjl@brooksleney.co.uk WILL HOSEGOOD


07785 192116 / wjh@brooksleney.co.uk


KAB SCIOX tractor seats.


Full range of economy tractor seats.


Forklift seats and seat spares for all types.


Full stock of GRAMMER seats and spare parts in stock.


Whether you are considering expansion, diversification, re-structuring or purchase, AMC can help you with your borrowing needs.


AMC loans available for business purposes only, provided on a secured loan basis. Minimum AMC standard loan £25,001. To meet customer requirements, lending criteria will vary. Lending subject to status.”


BROOKSLENEY.CO.UK LAND AGENTS IN EAST ANGLIA


Call 01236 421835 e: info@drivers-seats.com www.drivers-seats.com


Planning an Exit


of land could trigger a capital gains tax bill of up to 20%. Similarly, if a tenant receives a surrender payment then it could be treated as a disposal and result in tax being due.


Defra is now consulting on its plans to give farmers the option of taking their remaining Basic Payment Scheme (BPS) subsidies as a lump sum in 2022 to help encourage retirement within the sector.


To qualify, owner occupiers have to either sell or gift their land or rent it out on a minimum five-year Farm Business Tenancy (FBT). Tenants meanwhile will have to surrender their tenancies or - if allowed - arrange for a succession tenancy. Whatever the approach, they could all lead to a substantial tax liability that will require thorough consideration.


Capital gains tax Depending on its value, the sale or gifting


William Hargreaves Savills Suffolk 01473 234 802 whargreaves@savills.com


Farmers may be able to benefit from Business Asset Disposal Relief, which reduces the capital gains tax liability to 10%. However, there are time limits and a cap of £1million in a lifetime.


If a farmer chooses to gift their business assets, Holdover Relief may be an option, delaying the capital gains tax until the recipient sells the assets.


Inheritance tax Agricultural property and property held for a business purpose is usually exempt from inheritance tax.


However, if farmers decide to take a lump sum and dispose of assets that would benefit from Business Property Relief or Agricultural Property Relief, they risk their estate paying 40% inheritance tax on the cash they hold. They could reinvest proceeds into other


Savills Suff olk 01473 234 802


William Hargreaves from Savills in Suff olk explores the tax implications of Defra’s farmer retirement proposals


exempt assets in advance of death, but this would need a clear strategy.


If an owner occupier instead decides to grant an FBT the owner may still be eligible for Agricultural Property Relief on death. However, this may not cover the full value of the farmhouse or land and any buildings that have development potential.


How it all adds up Given the tax implications, the lump sum scheme is perhaps more appealing to tenant farmers who are likely to have less capital. Owner occupiers seeking to retire in the near future may instead be more inclined to consider contract farming or share farming arrangements that allow them to retain the tax reliefs and continue to generate income.


The current consultation acknowledges that tax considerations are an important factor when it comes to how the lump sum payment is treated. Discussions with HMRC are ongoing and potential applicants would be wise to take a holistic view when considering which course of action to take.


Truck seats from GRAMMER, KAB and ISRI.


Seat repairs, covers and spare parts for all ranges.


AUGUST 2021 •ANGLIA FARMER 73


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