Farmers across the UK risk leaving their children with ‘crippling’ tax bills after they die, one of the county’s leading rural lawyers has warned.
Helen Gough, an associate at Worcestershire law firm mfg Solicitors, says complex rules for inheriting agricultural land and buildings will see the Inland Revenue take more than it otherwise would need to, unless farmers plan ahead.
Ms Gough, part of mfg’s award-winning Agricultural and Rural Affairs division, has urged farmers to consider their succession planning and whether their current business arrangements are suitable for the long-term interests of their family as well as being as tax efficient as possible.
“It is no exaggeration to say hundreds of thousands of pounds can be saved if planning is done early enough, and there is no price tag that can be attached to the peace of mind that such planning can bring.” she said.
“Without that careful tax and succession planning, there is a very real risk that those inheriting farms and agricultural property will not only be left with a crippling tax bill but they may also have to face a dispute over who is entitled to what.”
Ms Gough, a regular spokesperson on rural issues, said farmers must work with their children to establish what each member of the family actually wants and what they are working towards, as well as the future of the farming business. She said this ‘creates certainty’ and strengthens the next generation’s commitment, avoiding heartbreak and litigation after parents have died.
She added: “If things go wrong, then as well as the tax bill the farm may have to be split up and sold off, while families are broken apart by dispute and legal costs.
“Effective planning is not hugely expensive and it ensures that everyone knows where they stand. Some people still think it isn’t a good topic to talk about, much in the same way as a pre-nuptial agreement before a marriage, but it is about fairness, protecting assets in the long-term and once the plan is in place, everyone can get on with their lives and concentrate on running a successful business.
“You cannot start planning too early.”
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