Golf Irons to Ploughshares: Golf course to revert to farmland

Remember the craze for converting farmland into golf courses in the 1980’s?  Two golf courses sold in the last few weeks offer an up-to-date perspective.  One was sold for conversion back to farmland, and the other as a going concern.  But at £5,000 and £10,000 per acre, which was which?

The Norfolk Golf and Country Club Golf and Leisure Complex, Reymerston, Norfolk was on the market for £1.6 million.  This course opened in 1995 on 159 acres, offering an 18 hole Par 72 course.  That’s about £10,000/acre.

The Mollington Grange course, near Chester, was also sold for a figure ‘in excess of’ £795,000.  This course opened in 1999 on 176 acres, offering an 18 hole Par 73 course.  That’s about £4,500/acre, or allowing for the estate agent’s hyperbole ‘in excess of’, probably in the region of £5,000/acre.

Both courses included club houses and other buildings; both were largely on former Grade 3 farmland (broadly free-draining sandy-loamy soils in each case).

Mollington Grange, at £5,000/acre was sold as the going concern, but Reymerston at £10,000/acre is destined to revert to farmland.  Food for thought and more less than 20 years on from their loss from agriculture in the first place.  Here today, gone tomorrow.

Both sales were handled by Savills:

Mollington Grange announcement

Norfolk Golf and Country Club announcement



Latest on Atkinson IHT Farmhouse Case: HMRC appeal successful

News is emerging that HMRC”s appeal in the Atkinson case has been successful.

The First Tier Tax Tribunal decided last year in favour of a claim for Agricultural Property Relief on a farm bungalow.  The property had been empty for some time – four years – because its occupier, a partner in the farming business, had gone to live in care. 

The Upper Tier Tax Tribunal has now reviewed this decision and come to the opposite conclusion.  The crux of the case seems to be the need to seek a sufficient connection between the use and occupation of the bungalow on the one hand, and the agricultural activity on the agricultural property over which relief from Inheritance Tax is claimed on the other.  Do the facts give rise to a sufficient connection?  In Atkinson the judges have decided it does not – the official report should be available soon, which should allow us to analyse this decision more closely.

Watch this space for further comment.

Furnished Holiday Lets: Act now to stay within the new rules from April 2012

Owners of furnished holiday accommodation should act now to ensure that important tax benefits are not lost next April.  In particular, the holiday season may need to be extended so that you can demonstrate that holiday accommodation is available for holiday lets for at least 30 weeks, and actually let for 15 of these weeks.  These periods are both 50% longer than before, and should be addressed now in order to ensure that lettings in the 2012 season continue to qualify.

Concise Rural Taxation 2011/12 explains that for many years, Furnished Holiday Lettings were subject to the same tax rules as other businesses, rather than the less generous provisions applicable to let property.  There were detailed requirements as to the period for which the property had to be available to let, plus a minimum period for which it was actually let.  These advantages were available in respect of property in the UK, but not for property elsewhere in Europe available for holiday lettings but subject to UK taxation.  In order to harmonise the treatment of holiday lettings subject to UK taxation throughout Europe, the 2010 Budget proposed that the advantages held by UK property should be withdrawn.

The 2011 Budget has however, reversed this without fully reverting to the original position.  The current position concerning Furnished Holiday lettings can therefore be summarised as follows.

Income from Furnished Holiday Lettings is broadly treated as business or trade income. It is therefore possible to claim:

•             Capital Allowances (against Income Tax)

•             Rollover Relief from CGT (Capital Gains Tax)

•             Holdover (Gifts) Relief from CGT

•             Entrepreneurs’ Relief from CGT

•             Business Property Relief from Inheritance Tax

•             Relief for Pension Contributions

•             limited Loss Relief, although this is now restricted to relief against profits from other Furnished Holiday Lettings.

These provisions apply to Furnished Holiday Lettings, subject to UK taxation, wherever they are situated in the European Economic Area.

The requirements to qualify for this treatment are as follows:

•             The enterprise must be run commercially, with a view to a profit

•             No letting should be longer than 155 days per annum

•             No single holiday let should be more than 31 days

•             The property must be available for holiday letting for at least 210 days (30 weeks) a year, with effect from April 2012 (previously 140 days, or 20 weeks)

•             The property must actually be let as a holiday letting for at least 105 days (15 weeks) a year, with effect from April 2012 (previously 70 days or 10 weeks).

With the exception of Loss Relief, the latest provisions have therefore restored the recent advantageous treatment of Furnished Holiday Lettings, albeit subject to more stringent requirements concerning minimum periods of availability and letting.  Furthermore these benefits have been extended to UK-taxed property throughout the European Economic Area.

This is a short excerpt from Concise Rural Taxation 2011/12, which also explains the various tax reliefs and allowances referred to here, as well as VAT (Value Added Tax) as it affects rural property.  Follow this link for more information.


Farm Blogging Survey: please help with survey design

I have been working on the design of a survey of farming blogs, and this blog is a request for your help with the design of that survey.  I am proposing to use a simple online survey based on a google form.  The answers are then automatically collated into a spreadsheet and it should be possible easily to share the collated results of the survey.

Key questions so far seem to be:

  • Identify a farmer/farming blog.  For each blog:
  • Who – user id
  • Who – person and location
  • Who – farm business owner or manager/worker or ‘other’: does the differentiation matter here?
  • What – blogging platform(s): blogger, FWi, FG, wordpress, twitter, youtube – am I missing any of the key sites?
  • What – farm: enterprises, size ….
  • Target audience (if known): other farmers, consumers, policy-makers, special interest groups, schools or other education, ….
  • Willingness of bloggers to respond to follow-up questions or interviews.

There’s a lot of stuff that can then be added by looking at the blogs themselves, for example:

  • Frequency of postings
  • Topics
  • Other stats – depending on blogging software, eg Twitter would allow easy capture of followers and followed, number of tweets etc.
  • Cross references to other sources (eg inclusion of weblinks)
  • Media: eg, Blogger + Twitter + YouTube (multiple media v single media) …
  • Focus, eg day to day farming diary, discussion with other farmers, explanation of farming activity, promotion of diversified farm enterprise, agricultural policy influence ….

So this blog is an invitation to ask you what you think the survey should be asking?  A previous blog on ‘Farmers who Blog’ generated considerable interest and I’m keen to build on this.

Finally thanks to the Harper Adams students who have expressed an interest in this area for their dissertations in 2012/12 – there’s still scope for a student who would like this challenge in 2011/12.  Just drop me a line if you are interested – contact details on the Harper Adams University College webpage.  The challenging part of a study like this is probably greatest in the background research – finding enough well-grounded published material for the literature review.  Once over that hurdle, a survey and its analysis should be straightforward leaving enough time for follow up work by a well-organised student.

Please do respond with your thoughts, whether you are a farming/farmer blogger here in the UK or elsewhere, a social-media pundit or an interested onlooker.

Calling all farmers who blog

This is an invitation:

  • An invitation to readers to see if we can make a comprehensive list of farmers who blog.  I have made a very modest start below, not yet counting microblogs on twitter for example – there seem to be more of these;
  • An invitation to a final year or postgraduate student at Harper Adams University College to research farmer blogs for the major research project/dissertation.

I am sure we could undertake a fascinating study of blogging amongst farmers.  For example, do farmers write for other farmers as another means of social interaction, is it a way for individual farmers to make the farming ‘voice’ heard by policy and law-makers, is the blog a direct link to consumers, is it all of these and more?  How often do farmers blog?  How much is this affected by seasonality?  What impact do farmer blogs have on their readership, and how big is the readership?  Is there a farmer blogger out there to rival the impact of former RSPB Director, Mark Avery?  What is the potential for farmer blogs as a medium for agricultural advice and development?  Can we/should we distinguish commercial farmers/managers/workers from hobbyists, foodies etc?

Please do provide feedback via the comments section, or to @charlescowap on twitter.  If we can compile a big list of farmer bloggers I’ll set up a separate page to list them all.

Meanwhile, here’s the fledgling list of farmer bloggers in the UK, plus a link to another blog which has tried to recruit farmer bloggers.

Farmers who blog

Matt Redman: Arable Farm Foreman, Bedfordshire:

Jon Birchall, Offley Hoo:

Jake Freestone: Farmer Jake:

Mudhound: land drainage contractor:

Owd Fred:

Neil Wilson, Low Barend Farm:

Farmers Guardian guest bloggers:

Farmers Weekly hosted blogs:

Farm Blogs from Around the World:



A small insight into the big problem of urban policing?

I spent the weekend in Harrow, staying in a normally quiet cul-de-sac.  At 2.20 am on Saturday morning we were awoken by a vicious assault and fight outside.  A call to 999 received no response other than a recorded message to say there was a long queue, and the suggestion to dial 101 instead.  Our subsequent 101 call prompted another recorded message to say that the queue was at least five minutes, with a suggestion to report the incident on a website.  Waiting and waiting, this call eventually timed itself out with the result that neither of our calls – 999 and 101 – had resulted in contact with a real emergency operator.

Meanwhile we had intervened in the nasty fight in any case.  One combatant – apparently the weaker victim of the assault – took shelter in our front garden by hiding behind a wheelie bin, the other shouted the odds from the garden boundary before eventually going on his way.

On Saturday we ‘phoned the local police station, and left a message on the ansaphone which promised a response within 24 hours.  This duly followed on Saturday evening – no doubt just as the Tottenham riots were getting under way.  Stick with 999 rather than 101 was a key message here.

Does this experience provide any insight into the awful riots of the last few days?  Such was the demand at this time on a Saturday morning that we were not able to get help from the Police.  This was ‘just’ a fight, but could it as easily have been a full-scale riot?  And if it was, was this the response of an adequately-resourced emergency service in our capital city?

And what degree of alienation leads men and women and children to feel they can loot and destroy with no feeling or regard or even fear for the consequences for themselves or others?  Add to this, the Nelsonian Blind Eye apparently turned by many others amongst the innocent bystanders.  Grave problems indeed, with deep roots demanding complex solutions.

This blog is about education and the rural economy, and the current problems of lawlessness facing our major cities may seem very remote from this concern.  However, only last week it was reported that theft cost the farming industry £50 million in 2010, according to NFU Mutual Insurers.  One of the problems for rual areas is the thinness of police cover – but is it any better in our urban areas, and where would you rather be during extreme civil unrest: town or country.

Tax: Make the most of farm machinery claims while you can

Businesses can claim an annual investment allowance of £100,000 for plant and machinery.   This means that if machinery up to this amount is purchased, the entire cost can be set against tax in the year of purchase.  Any amount over £100,000 is however, restricted to the annual writing down allowance of 20%.   Big changes take effect next April which should prompt careful planning now.

Two changes need attention.  First the £100,000 limit on claiming full expenditure in the year drops to £25,000 from April 2012.  So bring forward any planned expenditure on plant and machinery if that would help to minimise the tax bill without upsetting other considerations of cash flow and finance.

Secondly the Budget introduced a rather technical amendment concerning what are called ‘short life assets’.   The maximum ‘life’ of a short life asset is to increase from 4 years to 8 years as of this April.  This could be a good way to accelerate claims for allowances on big-ticket items like large tractors, combine and other harvesters.

 The general idea of short life assets is this.  The Writing Down Allowances on Plant and Machinery work by allowing you to claim 20% of the ‘reducing balance’, ie how much was left on account after last year’s claim.  Mathematically this means that after four years the cost of about 59% of an asset has been claimed against tax, and after eight years about 83%. 

The balance stays in a ‘pool’ with the other plant and machinery, the total balance slowly reducing from year to year – but never quite arriving at a final value of zero.  Short-life treatment enables you to avoid this tailing depreciation effect.  If say a machine is bought for £100,000 (the annual investment allowance having been used up on other purchases) and sold after three years, the total tax expenditure claimed will be about £48,800 by then, leaving a balance of about £51,200 against future claims.  If at the end of the third year the machine is sold for only £40,000 the difference of the written down value and the sale price, ie £11,200, is claimed as a final allowance against tax so that the full depreciation on the machine has been claimed over the period of its ownership. 

Before this April it was only possible to use the Short Life treatment for up to four years, but this period has now been extended to eight years.  At current write down rates of 20% pa on an outlay of £100,000, about £41,000 of the original purchase price remains unclaimed after 4 years and about £17,000 after 8 years.  This compares unfavourably with the previous allowance of 25% pa, where the respective figures would be £32,000 and £10,000.  So it might make sense to look at short life asset treatment for some of your more expensive, rapidly depreciating assets where they are held for periods of less than eight years.

Do beware however, the sting in this allowance’s tail.  A balancing charge can arise to tax where the asset is sold for more than its written down value, so it will pay to take a careful look at second hand prices when deciding on which route to follow.

An adapted version of this article first appeared in Barbers Rural Newsletter, Spring 2011 edition, (Copyright Charles Cowap)