Foot-and-mouth means land sales tax rockets

By FWi staff

TAX bills for those hoping to retire from farming could be up by thousands of pounds as foot-and-mouth restrictions curb dispersal and land sales, although swift action can still avert a financial crisis.

The main implication will be felt by those looking to cash in on this years higher capital gains tax relief of 150,000 on sales of assets such as land, buildings or quota.

From 6 April, relief will be cut by a third in line with the introduction of new business taper relief.

According to Mike Harrison, partner in charge of accountant Saffery Champnesss north west office, those most at risk are producers with capital gains between 100,000-150,000.

“At this level the disposal of assets ought to be made before the end of this tax year on 5 April. If carried over into 2001/02 the additional tax liability will be 12,500.”

With a week remaining of the tax year, producers must act fast, he adds.

If sales have been postponed, retirement relief can still be triggered using arrangements involving trusts without a physical sale taking place, says Mr Harrison.