It is not uncommon for farm businesses to shy away from Inheritance Tax planning, as it is sometimes controversial within families, and almost always time-consuming. However, a proactive approach is vital in tax planning to ensure eligibility for relevant reliefs.
Farm businesses benefit from Agricultural Property Relief (APR) and Business Property Relief (BPR) as a fallback where there may be an Inheritance Tax (IHT) liability.
Working alongside your team of professional advisors, Hobbs Parker Property Consultants can advise on how to best structure succession plans for your own farm. This can be particularly relevant where there have been changes to the business, such as the introduction of a diversification project. For example, projects such as holiday lets, as well as the introduction of equestrian uses such as DIY livery could potentially compromise the ability to claim IHT reliefs. These two examples are frequently subject to updates via cases being tested in the Courts. It is case law that determines how the Act is applied in practice.
In addition, where unexpected events occur or there are potentially contentious issues, such as multiple farmhouses within the business, we can work alongside your existing professional advisors to ensure a collaborative approach to providing RICS Red Book Valuation Reports for IHT purposes. The aim is to maximise results, which in this case, means to obtain the APR/BPR relief so that any IHT monies payable from the farm account are limited as far as possible.
Having sound IHT planning under way enables you to carry on what you do best – farming in the here and now, while we keep an eye on the future on your behalf to ensure there is a plan in place.