Landowners thinking of rewilding the countryside are being warned they risk losing agricultural property relief.
To qualify for APR, land needs to be used for the purposes of ‘agricultural production’, along with other requirements.
But if production is taken out for environmental schemes, chartered accountant Saffery Champness warns this could mean that the farmer will lose eligibility for APR.
Many schemes have been established to support and incentivise farmers who make their land better for biodiversity or for specific habitat creation. Capital tax policy in the past has seen certain schemes either named in the legislation or relief, and has continued to be available as the land set aside makes up a small percentage of the total land being farmed. As such, no restriction on relief has been required.
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But going forward, 'landscape scale' schemes are being encouraged to make significant inroads into flood management, soil regeneration, habitat recreation and biodiversity protection.
Some of the schemes will allow an element of agricultural occupation to continue, Saffery Champness explained, such as where grazing is required as part of an accelerated rewilding project.
However, the firm warns that many projects are likely to fail to meet the current definition of agriculture and therefore continued access to capital taxes relief will also fail. There will, it warned, be farms where environmental land management is the major land use, rather than this being ancillary to agricultural production.
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