Armstrong & Co understand the business of farming
J ames has extensive experience in agricultural sector from a farming background. James' family are pedigree dairy farmers and he has been involved with farming since a young age. He has infact lead the champion dairy cow which won the RUAS Balmoral Show in 1989..
He has a wide knowledge of all the farm suppliers and has vast experience of valuation of livestock. Both are necessary to ensure you minimise your tax liabilities.
Herd basis is useful where farmers elect their livestock in this way. A production herd may be treated as a capital asset if an election is made for Herd Basis. This is of major advantage when livestock values are rising. On herd disposal, i.e. retirement, the profit was then exempt.
Contract hire for expensive machinery may become a better option to minimise tax liabilities now that capital allowances are reduced. The monthly cost can be fully written off as an expense against your profits for the year.
He has done a lot of research into the McClean case - which has consequences for farmers letting land as conacre each year. This case has caused a lot of concern since HMRC denied Business Property Relief (BPR) on the McClean estate. The definition of conacre involves a degree of land husbandry. To prove valid conacre the farmer letting the land should retain responsibility for fertilizing, seeding, hedge cutting, drainage and fencing on the tenant's behalf. Documentary evidence is extremely important and annual conacre agreements should be produced, signed by all parties and retained.
Where land is let in conacre, it is necessary to look in detail at the amount of work done on the land annually by the owner in order to determine which reliefs against inheritance tax , if any, are available.If there is no evidence of work being done annually, then the Revenue may argue that no business is carried on, merely managing an investment, and no relief against Inheritance Tax may be available.
Capital Allowances on Capital Expenditure
Interpretation of the rules determine how much tax is paid. Certain fixtures in buildings and structures may qaulify as Plant & Machinery which are integral features eg plumbing, electrical & lighting. Capital Allowances are likely to be applied to slurry pits or tank storage above the ground. HMRC have issued guidance to advise farmers to distinguish between Land & Buildings, Plant & Machinery and Integral Features. HMRC have distinguished that the shell of the building such as walls, floors, ceilings, doors, windows and stairs do not qualify as Plant & Machinery.
If simply restoring to a previous state, can be treated as a repair and can be fully written off as a taxable expense. The key here is to get the builder to distinguish between buildings, integral features and repairs to existing buildings on the invoices.