Agricultural Business

Question 1

What is APR and when does it apply?

Answer 1

• Agricultural Property Relief
• Relief from IHT
• It applies when Agricultural land is transferred on death or during a persons lifetime
• Only only applies when the land is valued at ‘agricultural value’ and not development value for instance

Question 2

What are the ownership conditions you must meet in order to receive APR?

Answer 2

• ## Must have been used for agricultural purpose, and owned by the landowner in the 7 years immediately before death

Question 3

How do Agricultural tenancies impact APR?

Answer 3

-If you have a sitting 1991 Act tenant, landowner can only claim 50% relief as opposed to 100% relief, unless they are entitled to VP within 12 months or

Question 4

What legislation defines ‘agricultural value’ of a property?

Answer 4

Inheritance Tax Act 1984 - 115(3)

Question 5

Can woodland qualify for APR?

Answer 5

Woodlands only qualify for APR if the woodland is occupied with and ancillary to land attracting APR (e.g. farmland).

Situations where farmland is let to a tenant but the owner has retained the woodlands, APR on woodland would not be available.

Question 6

Other than APR, what other reliefs are available for Business owners?

Answer 6

Business Property Relief (BPR), again a relief on IHT

Question 7

Can a landlord receive BPR on a tenanted agricultural holding?

Answer 7

NO

BPR only applies to trading businesses and NOT investment businesses - receiving a rental income is considered as an ‘investment asset’

Question 8

When do the proposals in the Autumn 2024 budget take effect?

Answer 8

April 2026

Question 9

Can you explain the recent changes to APR in the Autumn 2024 Bill?

Answer 9

The first £1 million of Agricultural/Business assets will continue to receive 100% relief, however 50% relief thereafter

Question 10

What is a BRN and Why do you need it?

Answer 10

Business Reference Number

Needed to claim grants/funding on Rural Payments

Question 11

What is Slurry?

Answer 11

Slurry is the liquid waste produced by livestock farms, mainly from animal housing and feeding.

Question 12

What is Silage?

Answer 12

Silage is fodder made from green foliage crops which have been preserved by fermentation to the point of souring.

Question 13

What regulations control how slurry, silage and effluent is stored/managed?

Answer 13

Control of Pollution (Silage, Slurry and Agricultural Fuel Oil) (Scotland) Regulations 2003

Also mentioned in:

The Water Environment (Controlled Activities) (Scotland) Regulations 2011

Question 14

What changes are taking place in 2025 for Farmers and Crofters in order to be eligible for BPS?

Answer 14

Whole Farm Plan, need to meet (2) of the (5) requirements by May 2025

1. Health plans,
2. Soil testing
3. Biodiversity plan
4. Carbon auditing
5. Integrated pest management (IPM)

Question 15

What is the purpose of the Whole Farm Plan?

Answer 15

Aims to make farms more productive, profitable and sustainable, while producing high quality food and reducing emissions

Question 16

What do you suspect to see in future with regards to the Whole Farm Plan?

Answer 16

Currently, only required 2/5 but we suspect by 2028 farmers/crofters will require 5/5 to be eligible for BPS.

Question 17

Other than the Whole Farm Plan, what changes are being imposed in the Agricultural Reform Programme?

Answer 17

From January 2025, Calving interval for the Scottish Suckler Beef Support Scheme:

1. If the Calf born lives for 30+ days you get payment.
2. In order for it to qualify for SSBSS, Calving interval must be less than 410 days after its previous.

Question 18

What is a SAF form and why do farmers require this?

Answer 18

Single Application Form

You must fill out the SAF if you wish to claim BPS and Pillar 2 schemes (AECS,SSBSS, LFASS,FGS etc)

Question 19

When is the open/close time for SAFs?

Answer 19

Opens: 15th March
Closes: 15th May

Question 20

What does LPIS stand for and what is its purpose?

Answer 20

Land Parcel Identification System

Provides GIS information to the Rural Payments Services to calculate payments/entitlements.

Also gives the farmer the opportunity to view their farm business/understand boundaries etc.

Composed of different LPIDs

Question 21

What are the Min. requirements to claim BPS?

Answer 21

1. Be an ‘active’ farmer
2. Carry out ‘agricultural activities’
3. Submit a SAF
4. Have at least 3ha eligible agricultural land

Question 22

Why do you feel it is important for farmers to obtain red tractor/QMS status?

Answer 22

It provides buyers/consumers with confidence that the meat they are eating has encapsulated best practice in terms of animal welfare, food safety, and environmental protection.

As a result, you are able to sell items at a premium to the consumer, and you are exposed to a larger market

Question 23

Why are glass light fittings a problem and who’s responsibility is it?

Answer 23

Glass light fittings can cause issues with bedding, and feed contamination. If landlord building, technically landlord responsibility to ensure the buildings where livestock are stored, enable the farmer to suitably farm the holding, with relative efficiency

Question 24

You say you have discussed some alternative crop rotations on one of your clients estate, please can you elaborate on this?

Answer 24

Farmer was experiencing significant runoff, due to regularly exposed soil and topography of the field.

I advised that the client could look at retention of stubble, and consider direct drilling the cover crop in order to reduce tillage and fuel, and livestock could feed on this break crop (eg. turnips, rape)

Question 25

What is the main risk of planting Oilseed Rape in the UK?

Answer 25

Disease - Light Leaf Spot

Pest Damage - Cabbage stem flea beetle (CSFB)

Question 26

Identify some farming methods which you feel are important to undertake going forwards?

Answer 26

Regenerative agriculture techniques (e.g. min tillage, direct drilling, cover crops, break crops, legumes for nitrogen fixing)
They improve soil health and reduce loss of OM