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Whilst the Government’s focus remains on combatting COVID-19 for the time being, as clearly demonstrated in the Chancellor’s recent statement, the decisions about how to pay for the Government schemes have yet to be taken. The press has trailed potential focus on Capital Taxation because of the Government’s election manifesto pledges on Income Tax and VAT, but is it all doom and gloom?
Although the Crystal Ball remains opaque, it seems probable that Capital Gains Tax will increase and Inheritance Tax will come under pressure, with Agricultural Property Relief a likely target. It is also possible that Corporation Tax may be increased, although this may be for larger companies only.
The delayed budget provides a window of opportunity to assess how you want to structure your business and whether you want to accelerate sales that you were already considering.
For those who are lucky enough to have land with development potential, it may be prudent to consider transferring the site to an alternative vehicle. This will bring forward an initial tax bill and, depending on its current value, Stamp Duty Land Tax, but it could save on taxation overall.
There remain many tenancy agreements on estates which run from year to year. Considering alternative agreements, such as Share or Contract Farming, may help increase your trading income and also create greater opportunities for future Natural Capital income streams; these are discussed in more detail by Holly Story in her article on page 17.
It may also be a good time to bring the next generation into the business to spread the risk and encourage innovation to seek out the next crop or alternative income stream.
This brief article provides a snapshot of potential opportunities and food for thought at this uncertain time. We are busy working with clients to create and take advantage of these opportunities and look forward to discussing yours to see how best we can help.