NEWS LETTER
Nitrate Vulnerable Zone Consultation
As previously reported, DEFRA is currently consulting on changes to the Nitrate Vulnerable Zone programme. These changes will have a significant impact for dairy, pig and other livestock units, and are expected to mean that many such farmers will face substantial costs as a result. The consultation covers the following:
- Whole farm manure limit: Currently this is set at 250 kilogram’s of N per hectare for grassland. It is proposed that this will reduce to 170. In situations where farmers are heavily stocked, it could mean that manure would have to be exported, livestock decreased, or additional land farmed.
- Closed periods for slurry: Currently these only apply to sandy and shallow soils, but the intention is for this to be extended to all soil types.
- Slurry storage: Storage facilities for slurry will need to be for a period of at least 22 weeks. Farmyard manure is not affected by this requirement.
- Spreading: High-pressure and high trajectory methods of slurry application will be prohibited.
- Applications: If slurry is applied to bare soil or stubble, it must be incorporated within 24 hours.
- Sloping land: Applications of nitrogen fertiliser to steeply-sloping land will be prohibited where there is a significant risk of run-off.
- Record keeping: All farmers will have to complete a Manure Management Plan. In addition, an assessment of nitrogen balance and field-by-field recording will also be needed.
Presently, there is no intention to provide any capital grant aid to assist with any works that might arise as a result of the above.
It can be noted from the above, that the requirements are not assessed on an individual basis, but a blanket approach is used. If introduced, it is envisaged that this will be part of the whole farm approach and we would expect that this will form part of the cross compliance inspections.
For further help and consideration, please contact this office.
Changes to Capital Gains Tax from April 2008
Thinking of selling? avoid the increase in CGT
In the Chancellor’s pre-budget report on October 10th, he announced proposed amendments to CGT rates to take effect from April 6th 2008, which are likely to have a major impact for farmers considering selling farms and farmland after that date.
- Indexation Allowance is abolished (affecting assets acquired pre April 1998);
- Taper Relief is abolished for business and non-business assets;
- Assets held on March 31st 1982 to have a cost equivalent of their value at that date;
- A new standard rate of tax at 18%.
The changes might benefit disposals of non-business assets, but may more than double the rate for business assets. Most disposals of business assets currently qualify for Business Asset Taper Relief (BATR), which reduces the rate of CGT to 10%. The abolition of Indexation Allowance means that CGT will effectively be payable on inflationary gains made between 1982 - 1998.
Example 1: 100 acres of farmland sold at £4500/ acre in 2008 = £450,000.
Owned since before March 31st 1982.
1982 base value at £1,600/ acre = £160,000.
 |
Current CGT Rules: | £ |
| Proceeds: | 450,000 | |
| £160,000 indexed to 1998 | 327,500 | |
| Gain | 122,500 | |
| Annual Exemption | 9,200 | |
| 113,300 | ||
| CGT @10% (full BATR) | 11,330 | |
|
New CGT Rules: |
|
| Proceeds: | 450,000 | |
| Less 1982 value: | 160,000 | |
| Gain: | 290,000 | |
| Annual Exemption: | 9,200 | |
| 280,800 | ||
| CGT @ 18% | 50,544 |
The substantial rise in tax payable in this example is almost entirely due to the loss of Indexation Allowance.
It’s not all change though, as the following reliefs will remain:
- Business Asset Rollover Relief (which will become more important)
- Holdover Relief (deferring tax on gifts)
- Principle Private Residence Relief
- Annual Exemptions (currently £ 9,200)
- Companies liable for Corporation Tax for chargeable gains are not affected by the changes to CGT.
Example 2: A Traditional barn sold with planning consent in 2008 for £ 500,000
Owned since before 1982 – base value £40,000.
|
Current CGT Rules: | £ |
| Proceeds: | 500,000 | |
| less indexation £82,000 = | 418,000 | |
| Annual Exemption | 9,200 | |
| 408,800 | ||
| CGT @10% | 40,880 | |
|
New CGT Rules: |
|
| Proceeds: | 500,000 | |
| Less 1982 value: | 40,000 | |
| Gain: | 460,000 | |
| Annual Exemption: | 9,200 | |
| 450,800 | ||
| CGT @ 18% | 81,144 |
The rise in tax payable in this example is mainly due to the increased tax rate. Although the Chancellor is under considerable pressure to amend his proposals to benefit businesses, to date he has agreed to only minor changes. We will have to await the March Budget for further tinkering.
Moore Allen & Innocent has a tradition and reputation for working to help our Clients achieve their business and personal objectives through providing sound, practical and cost effective service. As rural property transactions become ever more complex it is important to employ professionals who can guide you to a successful sale or purchase.
We specialise in the marketing and transfer of all kinds of rural properties from farms and farmland to country houses, equestrian, woodland and rural development properties. If you would benefit from timely advice contact Mark Hill on 01285 648 105
Patrick Edwards Machinery & Vintage Tractor Auction Report
Moore Allen & Innocent were delighted to receive instructions from Patrick Edwards, who is well-known throughout the country, to disperse machinery and equipment on October 27th. His reputation, and the advertising undertaken by Moore Allen & Innocent, ensured that buyers from as far as West Wales, Devon, Dorset and the East of England came to see over 1,000 lots sold.
Selling started at 10.30 and finished as the light faded, with over 30 tractors sold, together with a complete range of farm implements, equipment and estate requisites. Top price of the day was achieved by a J reg Ford 7610 at £ 6,650, and another six tractors together with a Kubota excavator all achieved prices in excess of £ 5,000.
Vintage enthusiasts were able to choose between working machinery and restoration projects, with a Fordson Major E27N fetching £ 2,800. Also sold were chicken houses to £ 220, staddle stones to £ 250 and stone D troughs to £ 340.
Moore Allen & Innocent hold regular collective sales as well as dispersals for individual clients. Our next collective sale is planned for April 2008 near Lechlade. Entries and enquiries can be made to Emma Buse or Peter Kirby at this office – 01285 648 115.
For Sale by Private Treaty
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For Sale by Private Treaty as a whole or in up to 7 lots MILL FARM, EWEN Cirencester, Gloucestershire A beautifully positioned farm with sporting, equestrian & development potential and a 4 bedroom 17th Century Listed Farmhouse
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New Faces – Continued Growth of the Firm
Following recent staff changes and a significant increase in the level of business activity, we are pleased to welcome three new members of staff to the firm.
Katharine Foot will be working within the Agricultural team where her main focus will be working alongside Chris Graham & Robert Young on estate management work and in particular, landlord / tenant and environmental issues. From a farming family, Katharine started her surveying career as a graduate surveyor with a Wantage firm, undertaking a wide range of professional work and has recently passed her RICS exams to qualify as a Chartered Surveyor.
Luke Sparkes joins the firm as Assistant Surveyor in the Commercial and Development team and will be responsible for servicing the agency instructions across the office, industrial and retail sectors, as well as supporting John Thomson, Partner in Charge of the Commercial Department. Prior to joining Moore Allen, Luke was formerly Assistant Estates Officer at Cotswold District Council, where he gained significant experience in the office and industrial sector.
We also welcome Clare Blampied, who has recently started work in the Residential Property Lettings Department, assisting the team with viewings, tenancy issues and inventories. Commenting on the appointments, Senior Partner Robert Young said: “We are delighted to welcome Katharine, Luke and Clare to the firm. Their appointment is part of a programme of ongoing expansion for the business, which has seen considerable growth in recent times.” For further information on how we can help you contact us on 01285 651831
For clear, objective and professional advice on these or any other agricultural and rural estate issues please contact one of our Agricultural Team:
Robert Young ~ Mark Hill ~ Christopher Graham ~ Paul Oughton ~ Brian Smith
Peter Kirby ~ Stuart Milsom ~ Margaret Bush ~ Bethany Morris
Tel. 01285 648 113 Fax.
01285 640 494
This newsletter is produced for guidance
only and should not be used as a substitute for professional advice. Accordingly
no liability or responsibility for any loss or damage can be accepted
by Moore Allen & Innocent or other contributors as a result of any
person, company or other organisation acting or refraining from acting
upon comment on this newsletter.
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• Landlord & Tenant • Farming Agreements • Auctions • Compensation & Compulsory Purchase •
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