Any farm families thinking of amending their tax affairs on the back of proposed changes to Agricultural Property Relief (APR) from Inheritance Tax (IHT) should wait until the detail is fully known and understood, a leading accountant has said.

Addressing an Ulster Farmers’ Union meeting in Armagh last Thursday, Omagh accountant Seamus McCaffrey said it could be early spring of next year before a Finance Bill, which gives statutory effect to changes announced in the budget, is agreed.

“We may not know the detail of how they implement the IHT changes well into 2025. Don’t race in and make a kneejerk reaction – consult carefully with your solicitor / accountant,” said McCaffrey.

Trust

He said since the budget announcement there has been a lot of discussion about putting farms into a trust as a way of passing it on to the next generation. Many of the large estates in England are in trusts, although they tend to be used where the next generation is not actively engaged in farming.

“Trusts do have a role. It is an option, but for many of us, it is the last resort,” advised McCaffrey.

He said they can be quite complicated and expensive to set up and the trustees are still liable to an IHT charge of up to 6% of the value of property held in a trust every 10 years (potentially 3% in the case of a farm). There is also an exit charge when property leaves the trust.

“A trust is not a way of avoiding IHT – some might say all it is, is a deferral of IHT,” said McCaffrey.

Pickups

The other major change impacting farmers from the autumn budget was that the 100% tax allowance on double cab pickups is being removed from April 2025, so these pickups will be treated in the same way as cars, with a 6% allowance.

However, as things stand, farmers would still be able to claim back VAT on double cab pickups. “My fear is that you won’t be able to claim it back in the future,” said McCaffrey. He also warned farmers who are changing a pickup to make sure they get confirmation from the garage that the vehicle will be delivered before the April deadline.

Will

Irrespective of the budget changes, McCaffrey urged UFU members at the Armagh meeting to make sure they have a will that is reviewed every three years. “It should be prepared by a solicitor, not produced off the internet,” he said.