Budget 2016: Rural and property points

Headline points from the 2016 Budget for the rural economy and property. Get out of sugar, get into tunnelling, run a micro-business on the side, infrastructure needs you, take your capital gains now, incorporation is looking better and better unless you intend to sell your professional services to the public sector, drink whisky and beer not wine. Despite this, old age and death are beginning to look expensive.

A £3.5 bn reduction in public expenditure is not intended to dent George Osborne’s claim that, “We [ie the Conservative Government] are the builders”. Practically this means Continue reading “Budget 2016: Rural and property points”

Inheritance Tax Residence Exemption: Even more smoke and mirrors from the 2015 Summer Budget

The fanfare for this Summer’s July Budget trumpeted the arrival of a £1 million IHT exemption for the family home.  The detail is not so clear cut.  Chancellor George Osborne has introduced a new residence exemption from IHT.  It works like this. Continue reading “Inheritance Tax Residence Exemption: Even more smoke and mirrors from the 2015 Summer Budget”

Business tools for the rural estate: long and medium term planning

What business tools or techniques do we use on rural estates?  Does it all boil down to annual budgeting, assessing performance against projections, capital project planning, the occasional tax review?  Or is there more to it than that?  Strategic environmental analysis perhaps?  Simple SWOT analyses?  Sophisticated investment appraisal using DCF?  Stakeholder analysis?  Cost benefit analysis?  Multi-criteria decision analysis?

Over the next few months I will be researching this question for the Royal Institution of Chartered Surveyors/Royal Agricultural University 100 Club Fellowship.  Please help me by nominating your preferred strategic management tools for the rural estate.  A survey will also be launched soon.  The results are due to be presented at this year’s RICS Rural Conference, Land – delivering on all fronts on 18 June 2015.

So  please do help us to get off to a good start by sharing your experience of planning, marketing and decision-making techniques and tools on the rural estate through the comments box below – or if you would rather do so privately please use the ‘contact’ tab to send me a message.  I look forward to hearing from you.

One wood worth £70,000 but potentially five different Inheritance Tax bills ranging from nil to £28,000. Capital Gains Tax with potential bills on disposal ranging from less than £5,000 to more than £11,000.  This Wednesday’s web class will explain how to keep the tax bill down.  It will also look at the wider benefits that might be available to an estate that keeps its woods in good order.  RICS Web classes are not restricted to RICS members.  They provide a very cost-effective way to make sure you are up to date from the convenience of your own computer, and because they are ‘live’ you have all the benefits of being able to ask questions, and take part in online discussions.  This class in particular is highly relevant to anybody with an interest in private woodland ownership and management.

Details here: http://www.rics.org/uk/training-events/e-learning/web-classes/woodland-taxation-valuation/online/ 

The Privatisation of Biodiversity

Professor Colin Reid and Dr Walters Nsoh presented the conclusions of their research programme at the University of Dundee on 20 February 2014. Their research has focussed on the legal implications of the development of new ‘markets’ in natural capital. The emphasis tended to focus on biodiversity offsetting and payments for ecosystem services. Law Commissioner Prof Elizabeth Cooke provided an extremely helpful update on progress with the introduction of conservation covenants in England and Wales. The Parliamentary Draftsman is working on draft legislation following the Law Commission’s review last year so we are likely to see a new type of land covenant in the next two years or so. These covenants will be distinct because Continue reading “The Privatisation of Biodiversity”

Woodland Complexities

The latest Rural Briefing from RICS addresses the challenging area of woodland taxation and valuation.  A lot can go wrong as the examples we presented at yesterday’s South East Rural Update Conference demonstrated.  One wood worth £70,000 but potentially five different Inheritance Tax bills ranging from nil to £28,000.  Capital Gains Tax was little better with potential bills on disposal ranging from less than £5,000 to more than £11,000.

A link to the briefing paper and an introduction to it can be found here.

These slides summarise the paper.  David Lewis and I presented them at the RICS South East Rural Update on 24 February 2014.

Two further observations emerged during the conference discussion. Ensuring that woodlands can be recognised as a business asset may help to tip the balance in a ‘Balfour’ appraisal of a rural estate, helping to ensure that the majority of estate activity can be recognised for Business Property Relief from Inheritance Tax. This would not only save potentially high IHT bills on woodland assets themselves, but also on other estate assets which might otherwise be unrelievable. Another follow-up question concerned the production of biomass for ‘own use’. This could indeed be a grey area, but one approach may be to ensure that the value of the timber sales is clearly accounted for in estate and woodland records.