Chancellor’s Budget must grasp the land taxation nettle

The Tenant Farmers Association is urging the Chancellor of the Exchequer to set an agenda for reform of the taxation environment within which land ownership and occupation decisions within agriculture are made.

TFA Chief Executive George Dunn said “A fundamental review of the taxation environment within which land ownership and occupation decisions are made is long overdue. In any discussion about new entrants to agriculture, tenancy length or the role of contract and share farming, tax is by far the biggest driver and yet it has become the elephant in the room which no one wants to talk about.”

Through its 2015 FBT10+ campaign, the TFA set out some clear tax changes to reinvigorate opportunities for entry, progression and growth in the tenanted sector of agriculture. These were as follows:
▪ Restricting the generous, 100% relief from inheritance tax, currently available to all landlords regardless of the length of time for which they are prepared to let land, only to those prepared to let for 10 years or more.
▪ Clamping down on those landowners who are using share farming, contract farming, share partnerships and grazing licences as vehicles for aggressive tax avoidance where they take no risk, have no entrepreneurial input and lack any managerial control.
▪ Offering landlords prepared to let land for 10 years or more the ability to declare their income as if it were trading income for taxation purposes.
▪ Reforming stamp duty land tax to end the discrimination against longer tenancies.

“The TFA has had productive discussions with the Treasury and DEFRA but I get the feeling that civil servants have put this issue into the ‘too difficult’ pile. However, the Government must grasp this nettle or else we will see the let sector of agriculture descend over time into a patchwork of short term agreements providing no benefit to new entrants, sustainable land management or in building resilient farm businesses able to deal with economic and climate volatility,” said Mr Dunn.

“No one has come forward with alternative fiscal solutions to those identified by the TFA. At the very least we need the Chancellor to signal a commitment to reform which might encourage a better level of debate and engagement from the private landlord community than we have seen to date,” said Mr Dunn.

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