Agriculture, Brexit and Estate PlanningPepperells
Anyone who has agricultural assets, should get legal advice about planning for the future, be it succession planning or to ensure that their affairs can be dealt with if they lose capacity. The assets and circumstances of each client are usually complex and lead to numerous issues which need to be considered and addressed as quickly as possible.
Individuals with agricultural assets will usually have an estate which exceeds their nil-rate band allowance for Inheritance Tax purposes. With the right advice and planning, this can be mitigated or potentially avoided altogether. Other concerns can also be addressed, such as care fee planning.
One issue many agricultural clients grapple with is how to treat their children equally, particularly when some do not have any involvement with the agricultural work nor have any interest in the business. Such decisions must be made carefully, as there can be significant tax implications. These issues can be addressed within a Will.
The most important factor to consider with any agricultural client is the availability of Agricultural Property Relief (APR). To the extent that an asset qualifies for APR, it will be exempt from Inheritance Tax. However, one important fact to note is that the agricultural value and market value of an asset is not always the same. APR should be considered in conjunction with Business Property Relief (BPR). BPR is another Inheritance Tax relief that can be utilised on death, but only if certain criteria are met. The rules surrounding APR and BRP are complex and require tailored specialist advice.
Losing capacity is another important factor to consider. Appointing someone to be an Attorney for business assets may be fundamental in the success and continuance of a business. There are many situations that may arise that could prevent someone conducting the day to day duties within a business, for example, loss of capacity, an injury or being stuck abroad. This would allow the chosen Attorney or Attorneys to pay staff and suppliers, prevent accounts being frozen, finalise any ongoing contracts and enable the business to continue and thrive.
Another matter for agricultural clients to consider is the impact of Brexit. The ECA 1972, s 2(2) created many regulations affecting all aspects of environmental rules and regimes. The impact of Brexit on the agricultural and environmental sectors has left people with more questions than answers. However, it has also highlighted and given people the opportunity to consider diversification of their businesses and their long term plans generally. Getting specialist advice is therefore paramount to ensure that any future plans are considered in conjunction with the various tax reliefs. Call Pepperells on 01482 326511 to speak to a member of the Private Client Team for more information.