Tag Archive: Agricultural Property Relief

Utility Apparatus is Everywhere…

Whether it is pipelines, cables, pylons, or electric poles…. utility apparatus is everywhere. We sat down with Robert Moore to discuss whether utility apparatus really is a welcome addition across your property.

I don’t think there are too many property owners, occupiers, or farmers who welcome utility companies installing poles, cables, pipes or pylons across their property. The upgrading of apparatus or even simple maintenance can be a headache. For those who are reading this article who are not farmers, this will still be relevant to you. Whether apparatus is crossing your garden, or car park in your factory unit, utilities run everywhere and the issues are the same.

Utility apparatus

Spring has been incredibly wet this year. Land is lying saturated and field drains are flowing at full capacity. The negative implications of utility companies taking access to carry out such works at the current time can be huge, especially if care is not taken. Soil structure can be damaged as compaction takes place, causing yields to be negatively impacted.  There is risk attached, as loss of income can be incurred through disturbance and inconvenience being caused to a farming business, and of course, the same applies if you’re not farming.

It’s often the smaller maintenance or re-stringing jobs that pass by without much notice, but can often cause long lasting damage. Admittedly, sometimes a utility company will do a good job, but experience tells me that unless matters are agreed prior to entry, often the subcontractors ignore sense and just focus on completion without due care and attention. Of late, we’ve had several major cases of injury being caused to livestock in bizarre circumstances, but avoidable if the utility company had protected the animals from equipment being left in fields. Likewise, I have experienced appalling reinstatement being undertaken to damaged field drains, in which if not tackled, cause long lasting implications.

You could say that as a utility company is statutorily obliged to pay compensation, does it matter? Well yes it does, because in most cases the people or businesses being affected aren’t being compensated to the full extent which represents their loss, and really most would prefer not to have the damage caused in the first place. So here are a few pointers on what to do:

  1. What rights do they really have under the various acts? Can they store equipment on the land/yard, can they just come in when they like, and what routes must they follow? Can they upgrade the equipment or just replace what is there?
  2. Terms of entry must be agreed – get a plan in place at the start, agree access routes that suit your business; agree rates per hour for damages (don’t forget your own time…as business owners/managers, you’re not cheap); yields, losses, grazing etc. these contentious issues can be ironed out at the beginning of the project.
  3. Keep an accurate record of your time in a notebook – don’t forget that they need to put you into the position that you would have been had the entry not occurred. If the scheme goes on for years, you’ll never remember all your inconvenience at the end.
  4. Don’t be seen to be unreasonable, but make sure you cover all points.
  5. Ask for advice and help, be that solicitors, agents etc – the costs will be covered by the utility company.
  6. Be careful about accepting full and final settlements.

Finally don’t let them bully or railroad you into agreement, make sure your rights are protected.

If you would like to talk more about the negative implications of utility companies taking access, please contact Robert Moore on 07590 230510 or robertmoore@georgefwhite.co.uk.

Farmers urged to take note of vital Inheritance Tax changes

With great and historical changes afoot following the triggering of Article 50 which officially started our exit process from the European Union (EU), it’s safe to say that the UK is in a state of uncertainty as we move into the unknown. One thing that is not uncertain however is tax legislation, and key areas of the law have changed which farmers need to be aware of.

During the Spring Budget announcement, Chancellor Philip Hammond introduced significant changes to Inheritance Tax Legislation (IHT), which will be implemented in May this year. The biggest effect felt by farmers and landowners will be the significant cost increase to administering the deceased’s Estate.

To put it in simple terms, following your death, executors need to submit a tax return to HMRC and pay any tax that is due on your Estate (your ‘Estate’ being all of your assets). Up until now, there has been a small cost payable to HMRC for submission but, come May, this cost is set to increase significantly. Not only will there be the cost of valuing your Estate, solicitors and accountant’s fees, but, from May onwards, any Estate with a value greater than £2 million will have to pay a £20,000 fee to HMRC just to submit an IHT return irrespective of whether any death duties are payable. There is a scaled fee system as follows:

 

Under £50,000 No Fee 57% of estates
£50,000 to £300,000 £300 Fee 27% of estates
£300,000 to £500,000 £1,000 Fee 10% of estates
£500,000 to £1million £4,000 Fee 5% of estates
£1million to £1.6million £8,000 Fee 1% estates
£1.6million to £2million £12,000 Fee 0.2% of estates
Over £2million £20,000 Fee 0.4% of estates


The small print and why it is vital

It is important to note that the fee is payable on the value of your Estate and not the taxable element. For many farmers who will be eligible to claim Agricultural Property Relief (APR) or Business Property Relief (BPR) and therefore not be liable for any IHT, this will mean that they now must pay what is quite a large administration fee just to submit their IHT return.

For example, a 200-acre farm with a farmhouse, cottage and buildings worth £2.2m would previously have had to pay a small fee on submission, and the owner’s Estate would have been able to get 100% relief on the value of the farm using APR. While they still can claim the reliefs, this now means they will have to pay a £20,000 administration charge plus all of the professional fees.

What now?

We are urging farmers and other landowners to be aware of this, as it may mean an additional cash burden on their Estate which needs to be considered and reflected in their will. There could be ways to mitigate this by passing on assets before death but it’s paramount to get a realistic valuation completed, especially for Estates valued at approximately £2 million. This could save farmers a significant amount – up to £8,000 – if they fall on the right side of the line.

For more information about the changes to Inheritance Tax and how it may affect you, please contact Robert Thompson on robertthompson@georgefwhite.co.uk or 01665 511980.

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