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Welcome. 7.00 p.m. Lloyds TSB Agriculture – David Fowler Banking after the Big Bang 7.20 p.m. Simpkins Edwards – Mary Jane Campbell Agricultural & Business Property Reliefs – are you up to date? 7.40 p.m. Luscombe Maye – Amanda Burden See your way through the planning maze

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7.00 p.m. Lloyds TSB Agriculture – David Fowler

Banking after the Big Bang

7.20 p.m. Simpkins Edwards – Mary Jane Campbell

Agricultural & Business Property Reliefs – are you up to date?

7.40 p.m. Luscombe Maye – Amanda Burden

See your way through the planning maze

8.00 p.m. Simpkins Edwards – Mary Jane Campbell

Furnished Holiday Lets

8.15 p.m. Questions

8.30 p.m. Light Refreshments


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Banking after the Big Bang A banker’s perspective

David Fowler

Regional Agricultural Manager

Devon




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Banking after the Big Bang

  • Has our lending policy changed? – No

  • Are we lending new funds? – Yes

  • Have we met are commitment to lend an extra 15% - Yes

  • Has the cost of borrowing increased? – Yes

  • Are all banks the same? – NO!


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Banking after the Big Bang

Securing finance – be well prepared

  • Carefully prepared business plan

  • Accurate budgets & cash flows – sensitivity /stress test

  • Up to date Audited accounts

  • Security



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We are here to help

David FowlerRegional Agricultural ManagerDevon

01392 424871

07802 655897



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Inheritance Tax

Mary Jane Campbell


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Inheritance Tax (IHT)

Fact or Fiction?Farmers don’t pay IHT


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FACT

100% / 50% Agricultural Property Relief (APR) available on the agricultural value of agricultural property

Areas of difficulty:

  • Assessment of agricultural value

  • Existence of land & buildings no longer used for farming

  • Farmhouse


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FACT

100% / 50% Business Property Relief (BPR) available on assets used in business.

  • Aim in tax planning for farmers is for BPR to cover assets not already covered by APR.


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FACT

Availability of BPR subject to strict criteria including

  • Ownership periods

  • Ownership arrangements for assets


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FACT

Easy to slip up for entirely sensible commercial and personal reasons.

Take advice,

and then take it again

when there is a change of plan

- it will be cheaper in the long run.


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Fiction

Farmers don’t pay IHT

Fiction unless you work at the facts.


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BPR Recent Cases

Nelson Dance

Farmland with potential for residential development

  • Transferred it to a family trust

  • Subsequently ceased farming

  • Settlor died shortly afterwards

    HMRC chased the trust for IHT

    High court decided in favour of the trust.


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BPR Recent Cases

McCall

Owned land with development potential

Let land on annual grazing agreements

  • Deceased arranged maintenance of hedges/ditches etc

  • Grazier fertilised ground


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BPR Recent Cases

McCall

  • Judge decided the activity being undertaken was that of holding investment property.

  • Deceased did nothing to maximise the value of the grazing.

  • No BPR was available


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Farmhouses

Is it a farmhouse?

Tests

  • Centre of operations

  • Sufficient business activity and involvement

  • Character appropriate.

    Valuation issues


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Inheritance tax

Succession/retirement plans

Wills

Partnership agreements

Tax planning

To ensure wealth protection and security of income for all involved


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See your way through the Planning Maze

Amanda Burden

B.Sc (Hons), FAAV, MBIAC

Partner - Agriculture & Rural Planning Department, Totnes


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BACKGROUND

  • Degree in Agriculture with Countryside Management

  • Fellow of Association of Agricultural Valuers

  • Member British Association of Agricultural Consultants

  • Farmers’ Daughter & Farmers’ Wife

  • Joined LM in 1995,

  • Associate Partner 2000

  • Equity Partner 2007


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REASON FOR PLANNING

  • Expansion of Farm Business

  • Diversification of Farm Business

  • Capitalise on Assets/ Add Value

  • Need for additional dwelling

  • Lifestyle change/Retirement

  • Wish to “get on”

  • Asset for future generations


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PLANNING NEEDS PLANNING

  • Discuss with Agent early on….

    • Timescale

    • Costs

    • Planning Policy

  • Option to go through “Front Door” or “Back Door”


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The Planning Maze

Landscaping

Surveys

Design & Access

Application

Plans

Highways

COSTS !!!!!

Landscape

Consultees

Drainage

Planning Officer

Contaminated Land

Local Politics

Parish Council

Time

Policies

National

County/Local

DECISION


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TYPES OF RURAL PLANNING

  • Agricultural Buildings

    • Full Planning

    • General Permitted Development - 28 day Determination

  • Agricultural Dwellings

  • Barn Conversion – Traditional or Modern

  • Diversification Projects

  • Green Issues


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AGRICULTURAL BUILDINGS

  • Full Planning

    • Levels

    • Justification

    • Plans

  • General Permitted Development Rights

    • NO greater than 465 sq m

    • 25 m from road

    • For livestock 400 m from dwelling

    • LPA notification


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AGRICULTURAL DWELLINGS

  • Planning Policy Statement 7 (PPS 7) Annex A

    • Permanent Dwellings

      • Outline Application - Agree Principle of Need

      • Reserved Matters application later

        • Layout - Appearance

        • Scale - Access

        • Landscaping

    • Temporary Dwellings


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PERMANENT DWELLINGS

  • Requirements

    • Functional Need

    • Financial Test

    • No other dwellings suitable and available (incl. “affordable”)

    • Full time worker

    • Suitable site (within “sight and sound”)

  • Conditions

    • Ag tie on new build and existing ?


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TEMPORARY DWELLINGS

  • Demonstrate intentions to develop enterprise eg. Farmbuildings

  • Show business can be viable eg. Business Plan

  • Functional Need

  • No Disposal of “suitable” dwellings or no other dwellings close by

  • Siting and access are acceptable


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TEMPORARY DWELLINGS cont’d

  • Permission for temporary dwellings normally 3 years

    • Meet Financial test for permanent dwelling

    • Extensions of time not normally given

    • Will have to be removed and occupants made homeless if criteria not fulfilled

  • Temporary permissions should not be given on sites where LPAs would not allow a permanent dwelling


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TRADITIONAL BARN CONVERSIONS

  • Local Authority Policy

    • Business ? Holiday Use ? Residential ?

      • Marketing

      • Viability Appraisal

      • Proximity to farm activities/modern buildings

      • Curtilage

    • Detailed Plans

    • Design & Access Statement

    • Structural Survey


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TRADITIONAL BARN CONVERSIONS cont’d

  • Wildlife Report

  • Archaeological/Architectural Historian Report

  • Highways/Access Improvements

  • Contributions

    • Affordable Housing ?

    • Open Space ?

    • Education ?

  • Listed Building Consent


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MODERN BUILDING CONVERSIONS

  • Change of Use

  • Yard Area/Potential Parking Area

  • Size & Structure

    • End Use

    • Need for alteration

  • Access/Highways

  • Specific End Use Condition


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DIVERSIFICATION PROJECTS

  • LET YOUR IMAGINE RUN WILD ….

    • Barn Conversions

    • Camping & Caravan Sites

    • Fishing Lakes

    • Farm Shops

    • Dog Kennels/Catteries

    • Tourist Attractions

  • AND TALK TO YVONNE ABOUT SOME POSSIBLE GRANT FUNDING ……………


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GREEN ISSUES

  • Wind Turbines

  • Solar Panels

  • Ground Source/Geo-thermal Heat Pumps

  • Rainwater Harvesting

  • Slurry Storage/Covered Yards

  • SPEAK TO YVONNE ABOUT POSSIBLE GRANT FUNDING ESPECIALLY IF IN DAIRYING



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CERTIFICATE OF LAWFUL USE (CLU)

  • Backdoor Planning

    • Think

    • What do you have now ?

    • Has 4 or 10 years passed ?


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CERTIFICATE OF LAWFUL USE

  • 10 year & 4 year Rule

    • 4 years if created a “dwelling”

    • 10 years if Change of Use

  • Onus of Proof is on Applicant

  • Based on Balance of Probabilities

    • Statutory Declaration

    • Diary Evidence

    • Photographs

    • Supporting Letters


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PLANNING FOR THE FUTURE

  • Seek advice from Professional/Agent not just from Planning Authority

  • Seek advice from Accountant

    • Capital Gains ??

    • Inheritance Tax ??

  • Get a Valuation – Options ?

  • Plan well in advance – it always takes longer than we both would like !!


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REMEMBER !!!

  • Planning History on Sites

    • Withdrawals - Approvals

    • Refusals - Appeals

  • Hope Value ?

  • Conditions

    • Ag tie - Personal Permission

  • Consents normally last 3 years

    • Commence development subject to conditions

    • Policy Changes – re-apply well in advance


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See your way through the Planning Maze

Amanda Burden

B.Sc (Hons), FAAV, MBIAC

Partner - Agriculture & Rural Planning Department, Totnes


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Furnished Holiday Lettings

Mary Jane Campbell


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Furnished Holiday Lettings

Budget Red Book

“Budget 2009 announces the repeal of the furnished holiday letting (FHL) rules from April 2010. Until the repeal takes effect the FHL rules will be extended to those qualifying furnished holiday lettings elsewhere in the EEA.”


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FHL rules apply if:

Furnished Holiday Lettings

  • Let on a commercial basis

  • Available for letting for 20 weeks

  • Let for 10 weeks

  • Restriction to prevent continuous occupation for more than 5 months


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Tax results of applying FHL rules

Furnished Holiday Lettings

  • Activity is defined as a trade

  • Capital allowances are available

  • Trading loss relief apply

  • Rollover, holdover & entrepreneurs’ relief all available for Capital Gains Tax.


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After 2010

Income Tax

  • The old question “is FHL a trade?”

  • Central issue “are the taxpayer’s activities sufficient enough to make her a trader and not a mere landowner who derived an income by exploiting her property” from 1982 case

  • Class 2 and Class 4 National Insurance

  • Registration as self employed


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After 2010

Capital Gains Tax reliefs if trading status

Inheritance Tax, Business Property Relief

  • Reliant on definition of whether or not the activity amounts to a business

  • HMRC will be looking at level and type of services provided


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Action Points

Make use of CGT reliefs before

5th April 2010

- sell to a 3rd party

- sell at undervalue/gift

- sell and roll over proceeds




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