Tax changes won’t affect Cambs farmland market, says agent
FARMERS and landowners must now play their role in getting the country back on its feet, according to a Huntingdon land agent.
Rupert West, director of King West, said he expected the tax increases announced in Tuesday’s emergency budget to have little effect on the farmland market across Cambridgeshire.
He added: “Farmers and landowners must accept the imposition of higher taxes, although landowners who are actually farming their land will be in a position to benefit from Government proposals to extend the scope of the Entrepreneurs Relief, which allows future liabilities to be minimised.
“Since farming is a long term business we would not therefore expect the recent Capital Gains Tax increases to reflect adversely on the farmland market.”
Mr West added that those landowners who do not qualify as farmers but who invest for the long-term will be disappointed that their gains will be taxed at the same rate as short-term speculative gains, without even any allowance for the effects of inflation.
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“These landowners will be badly affected by the increase in the tax rate from 18 percent to 28 percent. The disposal of non-liquid assets such as land which cannot be disposed of in small parcels naturally results in large gains being realised, albeit at infrequent intervals.
“The addition of the capital gain to taxable income, under the new rules, will take the gain into the 28 percent tax rate even where the landowner’s income is subject only to the basic rate of tax,” he said.
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However, King West welcomed the Chancellor’s confirmation that the special tax rules for furnished holiday lettings will remain in force for the rest of the current tax year.
“These rules have enabled farmers to diversify into providing tourist accommodation, benefiting other local businesses such as pubs, restaurants and leisure attractions, as well as farmers,” said Mr West.