25 July 1997

Farmers should study what Budget left out

FARMERS should be more concerned about what was not in the recent Budget rather than what chancellor Gordon Brown actually said, according to accountants Deloitte and Touche.

The next Budget, in spring 1998, will probably see Labour closing the loopholes many experts had expected to see tightened this time round. These include farmland, lifetime gifts and trusts, warns tax specialist Chris Maton.

Agricultural property relief (from inheritance tax) is expected to fall from its 100% level, possibly to 75% or even 50%. Alternatively, the Chancellor could cap it at a certain level.

Lifetime gifts are also expected to receive some treatment, probably by increasing the period the donor has to survive beyond the current seven years. This could also be backdated.

Mr Maton also predicts a "donee" basis of inheritance tax, with beneficiaries having individual thresholds, rather than taxing the estate as a whole. This would encourage the spreading of wealth among more family members.