Tax U-Turn Will Benefit Farmers

Thanks to pressure from local MP Rory Stewart, Treasury Secretary David Gauke has confirmed that changes will be made to the finance bill that will help farming businesses, comments Rob Hitch of Dodd & Co Chartered Accountants.

In the original proposals debt secured on non qualifying assets used for the purchase of qualifying assets, such as farmland, would be deducted from the latter for IHT purposes if the loan was taken out to fund the acquisition of the farmland. Previously if the loan had been secured on non qualifying assets such as let commercial or residential property then it would be deducted from these assets when calculating exposure to IHT bills.

David Gauke has confirmed that following representation the new rules will only apply to loans taken out after 6 April 2013. This means anyone with business loans secured on  personal, IHT chargeable assets will benefit from the existing rules until loans are repaid.

‘This might present a planning opportunity and a consideration for those looking at restructuring their debt or prioritising repayments.’ Rob explained, ‘Anyone with business debt already secured on personal assets may wish to review their affairs to maximise opportunities presented by the Treasury’s changes.’

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