Partner Article

Farmers warned: Check your tax liabilities

Farming families should prepare themselves for additional scrutiny of their taxes, warn tax experts at Waltons Clark Whitehill.

George Hardey, Senior Tax Manager at the Tees Valley firm of chartered accountants and business advisers says Her Majesty’s Revenue and Customs (HMRC) will see the large valuations on agricultural property as a potential source of additional liabilities.

The warning comes as, in many cases, the farming population is getting older, resulting in a greater number of estates being administered, following the deaths of principals.

Additionally, the value of a lot of land has doubled, or increased by an even greater amount, since 2005. Changes and relaxation of planning rules and boundaries also mean demand is increasing for land where housing and similar developments can be built; this can have a dramatic effect on possible values and the potential tax liabilities that can arise on them, even where no sale has been agreed at the time of death.

George said: “Farming families may automatically assume that, provided their land is being put to some form of agricultural use, it will always be exempt from Inheritance Tax, but unfortunately the position is often not that straightforward.

“From HMRC’s point of view, because of the size of the valuations involved, there is obviously considerable scope for them to collect additional tax liabilities where they can successfully challenge claims that were made for Agricultural Property Relief and Business Property Relief against the value of the individual’s estate.

“Even if your land does not benefit from any hope or development value, HMRC may still want to try to challenge the level of APR available for the farmhouse.”

Advice is available from Waltons Clark Whitehill’s tax team, which can be contacted on 01429 234414.

www.waltonscw.co.uk

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This was posted in Bdaily's Members' News section by George Hardey .