I’m an absolute village idiot when it comes to finances (my savings account is ceramic and has ears), but I read a thing about the recent uproar over the farm inheritance tax where the farmers were saying something to the effect of “paying 20% tax on a farm every generation isn’t sustainable and will wipe out the business”.
But, if it’s a business, or like an asset owned by multiple people, isn’t there a thing for that?
Like having a registered business and the farm belonging to the business and those dwelling on it renting from the business, or a trust where all family members (children and grandchildren if applicable) are equal trustees?
Surely its foolish to have such a valuable family asset (£3m+ !!!) owned by just one person in the family anyway, regardless of recent budget changes, or is there something prohibitive about trusts that I’m ignorant of?
What are the advantages of transferring my farming assets to a Trust?
- Using a trust to manage farming land can be beneficial in allowing the land and any farming assets to remain together under the management of carefully appointed trustees.
- A trust also helps to protect the assets for your children and future generations. Often, it is difficult to predict which family members will be able to continue working in the farming business and how your loved ones’ circumstances may change in the future. The trustees can assess the situation as time passes and act flexibly according to the best interests of the beneficiaries. You can leave a letter of wishes as guidance to your Trustees.
- It may also help to reduce the likelihood of disputes within the family if the Trustees can take into account the beneficiaries’ circumstances before making decisions, rather than an outright gift of the farming assets over which you will no longer retain control and may no longer be appropriate.
- It can be more tax efficient for Inheritance Tax Purposes to leave your farming assets to a discretionary trust on death rather than outright to your spouse or another non-exempt beneficiary such as a charity. Information about the claim for relief from Inheritance Tax in relation to agricultural property is detailed below.
It’s NOT rocket science Guys. Get your Farms written into Trust. Today!