Auctioneers are set for a busy few weeks as farmers rush to beat the 5 April capital gains tax deadline.
Although most agents are predicting less land overall will be put up for sale in 2008, availability is already over eight times higher than the volume seen during the same period in 2007, according to the Farmers Weekly Land Tracker index.
An auction is seen as the ideal way to beat the Chancellor’s tax changes, which could see tax bills rockets following the abolition of taper relief and indexation, because contracts are exchanged as soon as the hammer falls. There is no guarantee that a private treaty sale would be wrapped up in time.
The sale of Quebb Farm at Eardisley, Herefordshire (pictured), by two brothers who are retiring from farming, is typical of the trend.
Michael Rose, of agents Brightwells who will be auctioning the 270-acre mixed farm on 26 March, said the timing of the sale had definitely been driven by Alistair Darling’s CGT changes. “Ideally we would be selling in the summer when everything looked better.”
He has guided the farm, which comes with a seven-bed period farmhouse, at £2.2m.
Angela Roberts of agent Johm Amos & Co is auctioning almost 48 acres of Grade 3 land at Obley, near Bucknell, Shropshire, on 20 March. “There should be a substantial saving because the sale will still qualify for taper relief and indexation,” she said.
Some sales, however, will incur smaller tax bills under Mr Darling’s new rules. For example, Martin Hemmett of Somerset agent Cooper & Tanner has delayed the auction of 105 acres of let land at Ditcheat, near Shepton Mallet, Somerset, until 18 April.
He said this was because let land was not treated as a trading asset and didn’t qualify for the reliefs associated with in-hand farmland. This meant the new 18% flat-rate for CGT, introduced as part of Mr Darling’s changes, could be more favourable.