Saffery Champness says that this also prompts major considerations for future tax planning.
The latest Defra Farmer Opinion Tracker published in July and updated in September shows the views and opinions of farmers in England about Defra’s vision for farming during the agricultural transition. This latest round of views reflects opinions up until April 2021.
“The scale of change to farming businesses being forecast and evident from the survey would suggest that there should be major considerations for future tax planning,” says Peter Harker, partner, and a member of the firm’s Landed Estates and Rural Business Group. He says:
“Should such dynamic change as is being forecast take place in the coming years, and farming businesses adjust and adapt as the survey suggests, then they must also consider impacts in terms of tax, particularly in relation to succession, to inheritance tax and capital gains tax. These considerations are important whether farmers change, grow, rationalise or downsize their businesses or indeed leave farming altogether.
“It is absolutely vital that such tax implications are considered in tandem with future changes. They could in some cases be a determining factor as to whether those changes actually make business sense for current and indeed for future farming generations.
“In addition, the survey shows that many farming businesses do not have the information or the advice they need to plan and support future change. The survey indicates that 32% of holdings do not have any of the information that they need for business planning and are unsure of where to find it.”
Other findings from the latest survey show:
- Farmers on 60% of holdings believe that they will make changes to their farming businesses in the next three to five years.
- 42% stated that changes included diversification into non-farming areas.
- 26% said that they would stay in farming but change their core agricultural enterprises.
- 23% planned to stay in farming but expand their business.
- 18% said that they would stay in farming but reduce the size of their business.
- 10% said they would leave farming because of planned retirement or handing the farm on to the next generation.
- 6% said they would leave farming for other reasons than above.
Note: respondents were able to give more than one answer.
The latest Defra Farmer Opinion Tracker is based on 1,135 responses from approximately 6,000 holdings in England.
More detail of the survey can be found here.