Farmers could enjoy tax boost
Farmers incorporating into limited companies could receive tax cut tax bill
Farmers incorporating into limited companies could receive tax cut tax bill
Farms that incorporate into a limited company could save thousands of pounds
of tax, according to advisers.
Accountants Old Mill Rural Services said that businesses which incorporate
after the introduction of the single farm payment (SFP) can receive an element
of the payment tax free by transferring the entitlement into the limited company
or partner.
SFP entitlements are classed as intangible assets and can be written off
against their income, said Old Mill partner Mike Butler.
Although the transfer could incur a CGT bill, the introduction of
entrepreneur’s relief on incorporation will significantly reduce that bill.
‘In total, a typical farming business could save more than £35,000 in tax by
incorporating after the SFP was introduced,’ said Butler.
But he warned that impending anti-avoidance legislation meant it was
particularly important to move into the new corporate structure with ‘sound
commercial justification’.
The SFP is the main agricultural subsidy scheme.
Further reading:
Health minister urges more tax for
the rich
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