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Farming & Rural Business Community

Annual meeting with the Central Association of Agricultural Valuers

Author: David Missen

Published: 09 Apr 2024

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It is now customary for a team from the ICAEW Farming & Rural Business Community to meet annually with representatives of the CAAV to discuss matters of mutual interest and concern.

The fixture this year took place on 11 March with Malcolm Gale, Martin Hall, Julie Liddle and Jeremy Moody representing the CAAV and Roseanne Bennett, Lucy de Greeff, David Missen and Keith Phillips speaking for the ICAEW. As usual, there was a significant technical agenda as follows:

  1. The Budget
    1. APR decisions
      1. Environmental extension
      2. Let land
    2. Roundtable on environmental assets and transactions
      • Off-site BNG agreements, nutrient neutrality agreements, carbon offsetting agreements, carbon credits outside ETS…
    3. FHLs – Income Tax and CGT
  2. Other taxation of environmental assets/transactions
    • Inheritance Tax
    • VAT
  3. Insights into Labour policy
  4. The Butler decision
    • Contract farming agreements
    • Interactions with Farmer/Balfour (Brander) approach?
  5. Move to financial year basis period
  6. Option to switch to the cash basis
  7. Stocktaking and SFI etc.
    • General
    • Valuation treatment and cut off issues of overwintered cover crops which have been ploughed in by March and which are the subject of SFI grants
  8. BPR availability for assets held outside partnerships (if a business asset and not farming)
  9. Settled Land Act Tenant for Life (Life Tenant) where the Trust owes the Tenant money for capital works on the estate – what happens to that debt on his death? Is it something chargeable as IHT or written off on his death as he effectively owns the property anyway?

The majority of these points are covered elsewhere within this or previous newsletters but one point of particular relevance for both bodies was the situation where cover crops are planted in the autumn but are incorporated back into the soil before a March year end OR where a winter crop has been planted but (normally due to adverse weather) has failed. In both cases there will be nothing to see at the year end, but in the former case the valuer should recognise the cultivation and input costs which will be included within the manurial content of the soil, in the latter case they will be written off. Where a field has been partially affected, it may often be right to carry forward all the costs of the crop there.

Valuers have advised to check with the client and accountant as to what is needed. From an accountancy perspective, where the cover crop forms part of an SFI claim, the SFI income recognition should match the valuation treatment.

*The views expressed are the author's and not ICAEW's