3 April 1998

FBTs to lose out?

FARM business tenancies may lose out to contract farming agreements after the recent Budget, says David Bolton of consultants Andersons.

Under the new capital gains tax taper, let land is classed as a non-business asset and is taxed at 24% after 10 years (13.8% for basic rate taxpayers). But contract farming, a business asset, is taxed at just 10% (5.75%) relief.

Unless the two are matched (as happened with inheritance tax allowances in early 1996), landowners are unlikely to favour FBTs, says Mr Bolton.