The UK's Tenant Farmers Association (TFA) has launched a new campaign on Farm Business Tenancies (FBTs), aimed at more than doubling the average length of term offered by landlords on FBTs. According to TFA National Chairman Stephen Wyrill, farm businesses need long-term security to ride out economic storms, and to service the borrowing necessary to support business development.
Wyrill said that landlords have gained considerably from recent legislative changes, and, in particular, a 100 percent Agricultural Property Relief from inheritance tax (IHT). Under the scheme, landowners can pass on some agricultural property free of IHT, either during their lifetime or as part of their will. Qualifying agricultural property is classified as land or pasture that is used to grow crops or to rear animals intensively.
The TFA does not want to set a statutory minimum term for FBTs. Wyrill explained: "If landlords want to let on a short-term basis they should be able to do so, but without the advantage of significant tax benefits. The TFA suggests that only those land owners prepared to let for ten years or more should be in receipt of the generous Agricultural Property Relief from inheritance tax."
The TFA is also calling on the Government to clamp down on owners of land who are able to gain a tax advantage by using vehicles such as share farming, contract farming, share partnerships, and grazing licences, when, according to Wyrill, "they are taking no risk, having no entrepreneurial input, and lacking any management control."
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