Welcome
7.00 p.m.
Lloyds TSB Agriculture – David Fowler
Banking after the Big Bang
7.20 p.m.
Simpkins Edwards – Mary Jane Campbell
Agricultural & Business Property Reliefs – are you up to date?
7.40 p.m.
Luscombe Maye – Amanda Burden
See your way through the planning maze
8.00 p.m.
Simpkins Edwards – Mary Jane Campbell
Furnished Holiday Lets
8.15 p.m.
8.30 p.m.
Questions
Light Refreshments
Lloyds TSB Agriculture
Banking after the Big Bang
A banker’s perspective
David Fowler
Regional Agricultural Manager
Devon
DATE
31/12/2008
17/12/2008
03/12/2008
19/11/2008
05/11/2008
22/10/2008
08/10/2008
24/09/2008
10/09/2008
27/08/2008
13/08/2008
30/07/2008
16/07/2008
02/07/2008
18/06/2008
04/06/2008
21/05/2008
07/05/2008
23/04/2008
09/04/2008
26/03/2008
12/03/2008
27/02/2008
13/02/2008
30/01/2008
16/01/2008
%
02/01/2008
LIBOR v BASE RATE 2008
LIBOR V BASE RATE
6.7
6.5
6.3
6.1
5.9
5.7
5.5
5.3
5.1
4.9
4.7
4.5
4.3
4.1
3.9
3.7
3.5
3.3
3.1
2.9
2.7
2.5
2.3
2.1
1.9
Base rate
1 month LIBOR
3 month LIBOR
6 month LIBOR
12 month LIBOR
0.77%
DATE
30/12/2009
16/12/2009
02/12/2009
18/11/2009
04/11/2009
21/10/2009
07/10/2009
23/09/2009
09/09/2009
26/08/2009
12/08/2009
29/07/2009
15/07/2009
01/07/2009
17/06/2009
03/06/2009
3.10
20/05/2009
06/05/2009
22/04/2009
08/04/2009
25/03/2009
11/03/2009
25/02/2009
11/02/2009
28/01/2009
14/01/2009
31/12/2008
LIBOR v BASE RATE 2009
LIBOR V BASE RATE
2.90
2.70
2.50
2.30
2.10
Base Rate
1.90
1 month LIBOR
% 1.70
1.50
3 month LIBOR
1.30
6 month LIBOR
1.10
12 month
LIBOR
0.90
0.70
0.50
0.30
Banking after the Big Bang
• Has our lending policy changed? – No
• Are we lending new funds? – Yes
• Have we met are commitment to lend an extra 15% - Yes
• Has the cost of borrowing increased? – Yes
• Are all banks the same? – NO!
Banking after the Big Bang
Securing finance – be well prepared
– Carefully prepared business plan
– Accurate budgets & cash flows – sensitivity /stress test
– Up to date Audited accounts
– Security
Lending to Agriculture
We are here to help
David Fowler
Regional Agricultural Manager
Devon
01392 424871
07802 655897
Gross Domestic Product
Inheritance Tax
Mary Jane Campbell
Inheritance Tax (IHT)
Fact or Fiction?
Farmers don’t pay IHT
FACT
100% / 50% Agricultural Property Relief
(APR) available on the agricultural
value of agricultural property
Areas of difficulty:
 Assessment of agricultural value
 Existence of land & buildings no longer used for
farming
 Farmhouse
FACT
100% / 50% Business Property Relief
(BPR) available on assets used in
business.
 Aim in tax planning for farmers is for BPR
to cover assets not already covered by
APR.
FACT
Availability of BPR subject to strict criteria
including
 Ownership periods
 Ownership arrangements for assets
FACT
Easy to slip up for entirely sensible
commercial and personal reasons.
Take advice,
and then take it again
when there is a change of plan
- it will be cheaper in the long run.
Fiction
Farmers don’t pay IHT
Fiction unless you work at the facts.
BPR Recent Cases
Nelson Dance
Farmland with potential for residential
development
 Transferred it to a family trust
 Subsequently ceased farming
 Settlor died shortly afterwards
HMRC chased the trust for IHT
High court decided in favour of the trust.
BPR Recent Cases
McCall
Owned land with development potential
Let land on annual grazing agreements
 Deceased arranged maintenance of
hedges/ditches etc
 Grazier fertilised ground
BPR Recent Cases
McCall
 Judge decided the activity being undertaken was
that of holding investment property.
 Deceased did nothing to maximise the value of
the grazing.
 No BPR was available
Farmhouses
Is it a farmhouse?
Tests
• Centre of operations
• Sufficient business activity and
involvement
• Character appropriate.
Valuation issues
Inheritance tax
Succession/retirement plans
Wills
Partnership agreements
Tax planning
To ensure wealth protection and security of
income for all involved
See your way through the
Planning Maze
Amanda Burden
B.Sc (Hons), FAAV, MBIAC
Partner - Agriculture & Rural Planning Department,
Totnes
BACKGROUND
• Degree in Agriculture with Countryside
Management
• Fellow of Association of Agricultural Valuers
• Member British Association of Agricultural
Consultants
• Farmers’ Daughter & Farmers’ Wife
• Joined LM in 1995,
• Associate Partner 2000
• Equity Partner 2007
REASON FOR PLANNING
•
•
•
•
•
•
•
Expansion of Farm Business
Diversification of Farm Business
Capitalise on Assets/ Add Value
Need for additional dwelling
Lifestyle change/Retirement
Wish to “get on”
Asset for future generations
PLANNING NEEDS PLANNING
• Discuss with Agent early on….
– Timescale
– Costs
– Planning Policy
• Option to go through “Front Door” or
“Back Door”
The Planning Maze
Survey
s
Application
Planning
Local Officer
Tim
Politic
e
s
Design &
Access
Highways
Landscap
Consultees
e
Drainage
Contaminated Land
Parish
Council
Nation
al
County/Loc
al
TYPES OF RURAL PLANNING
• Agricultural Buildings
– Full Planning
– General Permitted Development - 28 day
Determination
•
•
•
•
Agricultural Dwellings
Barn Conversion – Traditional or Modern
Diversification Projects
Green Issues
AGRICULTURAL BUILDINGS
• Full Planning
– Levels
– Justification
– Plans
• General Permitted Development Rights
–
–
–
–
NO greater than 465 sq m
25 m from road
For livestock 400 m from dwelling
LPA notification
AGRICULTURAL DWELLINGS
• Planning Policy Statement 7 (PPS 7)
Annex A
– Permanent Dwellings
• Outline Application - Agree Principle of Need
• Reserved Matters application later
– Layout
– Scale
– Landscaping
- Appearance
- Access
– Temporary Dwellings
PERMANENT DWELLINGS
– Requirements
• Functional Need
• Financial Test
• No other dwellings suitable and available (incl.
“affordable”)
• Full time worker
• Suitable site (within “sight and sound”)
– Conditions
• Ag tie on new build and existing ?
TEMPORARY DWELLINGS
• Demonstrate intentions to develop enterprise
eg. Farmbuildings
• Show business can be viable eg. Business
Plan
• Functional Need
• No Disposal of “suitable” dwellings or no
other dwellings close by
• Siting and access are acceptable
TEMPORARY DWELLINGS
cont’d
• Permission for temporary dwellings normally
3 years
– Meet Financial test for permanent dwelling
– Extensions of time not normally given
– Will have to be removed and occupants made
homeless if criteria not fulfilled
• Temporary permissions should
not be given on sites where LPAs
would not allow a permanent dwelling
TRADITIONAL BARN
CONVERSIONS
• Local Authority Policy
– Business ? Holiday Use ? Residential ?
•
•
•
•
Marketing
Viability Appraisal
Proximity to farm activities/modern buildings
Curtilage
– Detailed Plans
– Design & Access Statement
– Structural Survey
TRADITIONAL BARN
CONVERSIONS cont’d
– Wildlife Report
– Archaeological/Architectural Historian
Report
– Highways/Access Improvements
– Contributions
• Affordable Housing ?
• Open Space ?
• Education ?
– Listed Building Consent
MODERN BUILDING
CONVERSIONS
• Change of Use
• Yard Area/Potential Parking Area
• Size & Structure
– End Use
– Need for alteration
• Access/Highways
• Specific End Use Condition
DIVERSIFICATION PROJECTS
• LET YOUR IMAGINE RUN WILD ….
–
–
–
–
–
–
Barn Conversions
Camping & Caravan Sites
Fishing Lakes
Farm Shops
Dog Kennels/Catteries
Tourist Attractions
• AND TALK TO YVONNE ABOUT SOME
POSSIBLE GRANT FUNDING ……………
GREEN ISSUES
•
•
•
•
•
•
Wind Turbines
Solar Panels
Ground Source/Geo-thermal Heat Pumps
Rainwater Harvesting
Slurry Storage/Covered Yards
SPEAK TO YVONNE ABOUT POSSIBLE
GRANT FUNDING ESPECIALLY IF IN
DAIRYING
vs
CERTIFICATE OF LAWFUL USE
(CLU)
• Backdoor Planning
– Think
– What do you have
now ?
– Has 4 or 10 years
passed ?
CERTIFICATE OF LAWFUL USE
• 10 year & 4 year Rule
– 4 years if created a “dwelling”
– 10 years if Change of Use
• Onus of Proof is on Applicant
• Based on Balance of Probabilities
–
–
–
–
Statutory Declaration
Diary Evidence
Photographs
Supporting Letters
PLANNING FOR THE
FUTURE
• Seek advice from Professional/Agent not just
from Planning Authority
• Seek advice from Accountant
– Capital Gains ??
– Inheritance Tax ??
• Get a Valuation – Options ?
• Plan well in advance – it always takes longer
than we both would like !!
REMEMBER !!!
• Planning History on Sites
– Withdrawals
– Refusals
- Approvals
- Appeals
• Hope Value ?
• Conditions
– Ag tie
- Personal Permission
• Consents normally last 3 years
– Commence development subject to
conditions
– Policy Changes – re-apply well in
advance
See your way through the
Planning Maze
Amanda Burden
B.Sc (Hons), FAAV, MBIAC
Partner - Agriculture & Rural Planning Department, Totnes
Furnished Holiday
Lettings
Mary Jane Campbell
Furnished Holiday Lettings
Budget Red Book
“Budget 2009 announces the repeal of the
furnished holiday letting (FHL) rules from
April 2010. Until the repeal takes effect the
FHL rules will be extended to those
qualifying furnished holiday lettings
elsewhere in the EEA.”
Furnished Holiday Lettings
FHL rules apply if:
Let on a commercial basis
Available for letting for 20 weeks
Let for 10 weeks
Restriction to prevent continuous
occupation for more than 5 months
Furnished Holiday Lettings
Tax results of applying FHL rules




Activity is defined as a trade
Capital allowances are available
Trading loss relief apply
Rollover, holdover & entrepreneurs’ relief
all available for Capital Gains Tax.
After 2010
Income Tax
 The old question “is FHL a trade?”
 Central issue “are the taxpayer’s activities
sufficient enough to make her a trader and
not a mere landowner who derived an
income by exploiting her property” from
1982 case
 Class 2 and Class 4 National Insurance
 Registration as self employed
After 2010
Capital Gains Tax reliefs if trading status
Inheritance Tax, Business Property Relief
- Reliant on definition of whether or not the
activity amounts to a business
- HMRC will be looking at level and type of
services provided
Action Points
Make use of CGT reliefs before
5th April 2010
- sell to a 3rd party
- sell at undervalue/gift
- sell and roll over proceeds
Questions…..
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bottle of champagne,
please remember to hand
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