CLA: Tax barriers hit diversification
By FWi staff
EFFORTS by farmers to heed government advice and diversify into other areas of business are being stymied by tax barriers, claim rural lobbyists.
The Country Land and Business Association (CLA) says that ministers must harmonise all rural business activities as a single rural business unit.
CLA chief taxation adviser Adrian Baird said: This will remove tax considerations from business decision-making and allow businessmen to stimulate the badly damaged rural economy.
Barriers include parallel Capital Gains Tax (CGT) on indexation and taper relief, and distinctions between business assets and non-business assets.
Agricultural property relief from inheritance tax is jeopardised if a landlord or his tenant diversify, adds the CLA.
CGT inhibits reinvesting gains from certain rural business to others, says the CLA. Reinvested capital gains get no relief when invested in let buildings.
The 20-page document A tax framework for jobs and enterprise in the rural economy has been sent to the Chancellor Gordon Brown.
It is also available on the CLA website.
- CLA sees little relief for crisis-hit farms, FWi, 07 March 2001
- Farmers to benefit from tax reforms, FWi, 18 December, 1998