Farming News - The Chancellor Should Use “Fiscal Levers” to Assist Progressive Farmers
The Chancellor Should Use “Fiscal Levers” to Assist Progressive Farmers
The Tenant Farmers Association (TFA) is urging the Chancellor of the Exchequer to use his spring Budget to bring the farmland market into better balance, providing a sound platform for a progressive farming industry post Brexit.
A combination of overheated land prices and cripplingly short-term rental agreements is preventing sustainable routes for new entrants and progressive farmers.
TFA Chief Executive, George Dunn, said “We have known for some time that an extremely benign taxation framework surrounding agricultural land has fuelled the rise in land prices. At the same time, there is no incentive to encourage landlords to offer long-term farm tenancies. Almost half the current value of farmland has been added over the past 10 years, whilst the average length of term on farm business tenancies has been around four years or less”.
“Successive Chancellors of the Exchequer have shied away from using their fiscal levers to influence the market in agricultural land to encourage more long-term thinking. We hope that in the context of building a successful agricultural industry post Brexit, that Chancellor Javid will take a different approach when he delivers his budget, expected next month”.
The TFA’s proposals for tax changes include the following:
- The abolition of Capital Gains Tax rollover relief involving land purchases except where a capital gain has been made as a result of compulsory purchase.
- Restricting the generous, 100% Agricultural Property Relief from Inheritance Tax (currently available to all landlords regardless of the length of time for which they are prepared to let land) only to those prepared to let for 10 years or more. Landlords should have the opportunity to lock this in from the start of the tenancy.
- Allowing landlords letting land for 10 years or more to declare their income as if it was trading income for taxation purposes for the duration of the tenancy.
- Clamping down on landowners using share farming, contract farming, share partnerships and grazing licences as veneers of trading activity for tax advantage.
- Reforming Stamp Duty Land Tax to end discrimination against longer tenancies.