Agriculture

David Turner & Co Ltd - Specialist Agricultural Accountants in the UK

We provide all the services shown elsewhere in this website to businesses of all sizes in the Agriculture sector. David Turner & Co Ltd was created when David purchased PwC’s specialist agricultural accountancy practice in 2007. By having what we believe is a first class client base in Agriculture we can:

Add value to your business, even when we are carrying out compliance services. For example our approach to the accounts preparation for farms and estates is substantially based on our farming experience and expectations enabling us to benchmark your results.

Farmers often like to feel they are different, but the basic business principles apply to farming as they do to any other business activity. i.e. the need to make/produce something and sell it for more than it cost to make/produce, although in agriculture the timescales involved can be longer than is often the case and farmers have to contend with more political interference than many others. However in terms of tax farmers really are different (not just in their general dislike of paying it!).

Tax - areas specific to farmers

Revenue matters

  • Stock valuations
  • Contract and share farming arrangements
  • Averaging elections
  • Herd Basis

Capital taxes

  • Agricultural Property Relief (APR)
  • Farmhouses
  • Agricultural Tenancies - 1986 AHA tenancies and post Sept 1995 tenancies
  • Business Property Relief - including grazing agreements
  • Capital Gains Tax (CGT) issues - especially entrepreneurs relief

For many farmers and landowners Inheritance Tax (IHT) relief is the main area for planning opportunities, or equally for ‘shooting yourself in the foot’. Often the fiscal regulations are at odds with the commercial stance that DEFRA are increasingly encouraging farmers to follow. It is all too easy to lose IHT reliefs as a result of taking a logical commercial approach - this can be a very expensive mistake to make. Are you receiving proactive advice to ensure your ‘income generating projects’ are consistent with your IHT planning?

Additionally, the all too common thought that farmers can ignore IHT because they receive 100% is wholly inaccurate and dangerous. They can benefit from 100% relief but careful planning is needed. Recent tax cases have highlighted many pitfalls which cause the IHT relief to be lost in total. This is an all or nothing relief (except in the case of the 50% relief for specific assets, e.g. a 1986 AHA tenancy where there hasn’t been a post Sept 1995 succession).

In particular HMRC have ‘had a go’ at APR on Farmhouses and certain contract farming agreements.

With the correct advice you can maximise the likelihood of getting 100% relief from IHT on your land and (hopefully) on your farmhouse, but note the impact of the ‘Antrobus 2’ valuation issue.

With land prices of say £8,000 per acre the potential IHT liability for a 500 acre farm with a modest house is in the region of £2,000,000. Would the next generation thank you for leaving them with such a bill unnecessarily?

This is a specialist area which needs specialist advice - David Turner & Co Ltd are such advisers. Do not leave this to chance, we have extensive experience in this area and we understand the ‘all too easy to fall into’ pitfalls and the areas which are likely to be challenged.

Have your advisers spoken to you about the above issues. Are you aware of the IHT status of the different types of tenancy? Many 1986 AHA tenancies only benefit from 50% APR, have you looked at the possibility for converting this to 100% relief whilst retaining an AHA tenancy in place?

For land owners and farmers the CGT goalposts have changed very significantly in recent years, with the loss of indexation and taper relief combined with the increase in land values. Again CGT needs to be carefully planned for, in advance, in relation to any land transaction. Holdover and rollover reliefs are back with us big time as well as the hugely valuable entrepreneurs relief - but this requires careful planning in advance of any transactions.