PROFESSIONAL UPDATE

By now most farmers and landowners, or anybody with an interest in property, should be aware of and have complied with the following:

Home Information Packs. The Home Information Pack and the Energy Performance Certificate are now a mandatory requirement for qualifying residential properties brought to the market. All residential dwellings are now required to have commissioned a Home Information Pack prior to being marketed. A Home Information Pack must be provided in the prescribed form unless the subject property qualifies as an exception. Farms of more than 5 hectares sold as a whole are likely to be exempt properties but otherwise farm houses and cottages are likely to require a Home Information Pack preparing. P Wilson & Company can advise on and co-ordinate the preparation of the Home Information Pack.

Single Payment Scheme. Are you aware of the current changes to the Single Payment Scheme, including the issues surrounding the abolition of FVP authorisations and the new nil rate for set aside, which apply this year. The combined effect of these changes to the system will mean that farmers will be able to claim SPS on land which they are growing potatoes, onions etc, regardless of how many FVP entitlements they hold and that farmers will not be required to managed any land in accordance with the set aside rules. This means that you can grow crops or keep livestock on land that you would normally have to use to match your set aside entitlements, yet still receive the set aside entitlement payment. Additionally farmers will still be able to leave land uncropped for 2008 so long as they manage it in accordance with cross compliance GAEC 12.

Fire regulations and the Regulatory Reform (Fire Safety) Order 2005 requiring fire safety certificates for relevant premises –- have you complied?

Tenancy Deposit Scheme. As from April 2007 all landlords granting new Assured Shorthold Tenancies for residential property should now be part of this scheme. Have you complied?

Nitrate Vulnerable Zones. DEFRA believe that the recent review of Nitrate Vulnerable Zones indicates a need to increase their coverage to about 70% of England. If implemented, this will have a substantial effect on farmers not currently within a Nitrate Vulnerable Zone, in terms of the amount of nitrogen that can be applied, and when, and the storage capacity of slurry/farmyard manure that they are required to provide.

Pre-budget Statement In his first pre-Budget Statement, Chancellor Alistair Darling announced alterations to Inheritance Tax and forewarned of his intention to make significant changes to Capital Gains Tax. The proposed abolition of Capital Gains Tax Taper Relief and the introduction of a single tax value of 18% subject to the new Entrepreneurs Relief of 10% of qualifying gains up to a £1,000,000 threshold have received much attention in the press, with many commentators anticipating a rush of sales of business owners before 6th April 2008 to avoid what could amount to an 80% high the tax rate. What has received less attention, however, has been that the Chancellor also intends to scrap Capital Gains indexation; which currently has the effect of increasing the deemed acquisition value of the asset to which Taper Relief is then applied. The proposed removal of indexation will mean that the effect of inflation will no longer be excluded, thereby increasing the chargeable gain. In the case of agricultural land acquired prior to March 1982, the chargeable gain is likely to double –- at least!