Rural matters are currently featuring heavily in the media following the autumn budget. South West law firm Stephens Scown, in partnership with Estate Agents and Property Consultants Carter Jonas and Chartered Accountants Francis Clark, hosted an event supporting local landowners and farmers.
Held at the Royal Cornwall Showground, the event drew a near-200-strong crowd eager to hear the latest rural updates and to understand what impact the budget would have on their businesses and livelihoods.
The speakers were acutely aware of the concerns felt by those present and each offered clarity on the issues faced, along with the support available as part of the hosts’ collaborative approach. First to speak were Chris Anderson and Jessica French from Carter Jonas, who discussed nature markets, a means of unlocking new funding and finance options to pay for activities that help to restore and protect the environment. In the farmed environment, that would include:
- Carbon sequestered through improvements to soil or other habitats.
- Improved biodiversity.
- Improved water quality.
- Reducing flood risk through natural flood management.
Chris spoke about the different schemes, the length of agreement for each undertaking, the value, and the importance of understanding what you have now in terms of land and property. He discussed potential barriers to entry, which could include any existing environmental agreements in place plus tax implications and the impact on land and property values.
He also considered the consultations taking place regarding Cornwall’s local nature recovery strategy, which are statutory requirements of the Environment Act. An interactive map demonstrated the areas affected by the plans aimed at growing and recovering nature. The section concluded with a look at planning and development, with a near doubling of the required number of houses to be built in Cornwall, and what that could mean for the availability and use of land in the county.
Next, Brian Harvey, Partner at Francis Clark, addressed the budget. It will be Spring 2025 before any legislation is expected. For now, there are no changes to the qualification criteria for Agricultural Property Relief (APR) and Business Property Relief (BPR).
At this stage, it’s unclear how many landowners will be impacted, but Brian spoke about the headline announcements regarding Inheritance Tax (IHT). These included:
- Nil rate band of £325k frozen until 2030.
- APR/BPR: 100% allowance of £1m, which is per individual and non-transferable.
- APR/BPR has 50% relief above the £1m allowance.
Giving a breakdown of the figures based on a farm valued at £4m, plus examples based on ownership and marital status, Brian explained who is likely to be impacted and stressed that through planning, most will be able to improve their position.
Making it clear what farmers and landowners should be doing now, the talk sought to show that there are practical steps to take that can be of huge benefit to protect these vital assets for the next generation. In his summary, a key point was to get professional advice, and not go via what you might read in the newspapers or see on the news.
It was then the turn of Phil Reed, Partner at Stephens Scown, head of the Firm’s Rural sector team, to further look at APR/BPR planning options.
His message was about the importance of planning, to look at Deeds of Variation in recent Estates, to review Wills, look at lifetime gifts and the opportunities provided by Trusts. Undertaking IHT audits with an expert, he reassured the audience, would help provide solutions to many of the issues currently being featured in the press.
Phil spoke about the lobbying efforts of associations and organisations, pointing out that with many rural constituencies having elected Labour politicians, it was important to let them know the strength of feeling among voters.
Finally, Sarah Atkinson, Partner and head of Stephens Scown’s Family Finance team, spoke about prenuptial and postnuptial agreements and their importance. The agreements can ring-fence assets from being shared or help limit claims in the event of divorce and can be entered into at any point before or during a marriage. There are also cohabitation agreements for couples living together offering similar protection.
Farming divorces are often some of the most expensive and disputed cases given the value of the property and questions about ownership of the assets. Whilst courts are reluctant to sell farms, they will want to know everything has been extracted to meet a person’s needs to avoid a sale.
Sarah focused on how they can help by bringing clarity to a marriage, helping to address potential wealth imbalances in the partnership, with the value of protecting assets for the benefit of future generations.
A successful night ended with advice for those in attendance to consult experts regarding any concerns or about potential opportunities, and to continue supporting one another in this hugely important sector for Cornwall and the South West.