The Longer View

Could the obligation for developers to leave the environment in a better state than they found it lead to opportunities for landowners?

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On the 4^th November 2019, the Government launched the £50 million Woodland Carbon Guarantee Scheme, which aims to facilitate the widespread planting of trees and develop a domestic market for woodland carbon.

Scheme participants will be offered the chance to sell Woodland Carbon Units to the government over a 35 year period at a guaranteed price set by an online reverse auction. The auctions will take place every six months for up to five years, with the first being held in early 2020.

In order to bid in the auction, applicants will need to calculate how much money they require to make their planting financially viable. If successful in the auction, the government will ‘guarantee’ to buy the CO₂ for the price that the applicant bids, though the price is protected against inflation for the duration of the contract. CO₂ is measured in Woodland Carbon Units and successful applicants are given the option to sell the units to the government at a guaranteed price every 5 or 10 years up to 2055/56. The government’s guarantee is effectively a back-up, and applicants can sell their carbon on the open market at any time, for example to businesses looking to offset their CO₂ emissions.

Applicants will need to register with the Woodland Carbon Code before they apply for the Guarantee.

Guarantee applications can be made alongside other grant-aided schemes, for example Countryside Stewardship. On top of the existing commercial market for timber, the existing grant funding for woodland creation and management and the recreational and sporting value, the scheme adds an additional financial incentive to create and manage woodland.

For more information, please contact Cameron Hughes, Surveyor (cameron.hughes@carterjonas.co.uk / 01865 404441), or your local Carter Jonas office.

The Rural Development Programme for England (RDPE) has reopened their Growth Fund for new applications.

The Growth Fund aims to promote economic growth and job creation in rural England, with grants available to help pay for building work or equipment and machinery for projects which will help to achieve this aim.

Grants fall into three categories: business development, food processing, and rural tourism infrastructure.

The first step is to submit an expression of interest, by 16th February; if you're accepted, the next step is a full application.

There is limited funding available, with grants given to the most compelling projects. We can help you construct your expression of interest or application in a way to maximise your chance of success.

Contact your local expert:

South East
Cameron Hughes
Surveyor
01865 404441
Cameron.Hughes@carterjonas.co.uk

South West
Hollie Hembrow
Associate
01823 428598
Hollie.Hembrow@carterjonas.co.uk

North East & Yorkshire
James Bradley
Partner
01423 707854
James.Bradley@carterjonas.co.uk

North West
Morgan Robinson
Partner
01539 814907
Morgan.Robinson@carterjonas.co.uk

East
Michael Appleton
Partner
01604 608214
Michael.Appleton@carterjonas.co.uk

West
Isabel Speakman
Surveyor
01743 213285
Isabel.Speakman@carterjonas.co.uk

Anyone wanting to claim agricultural property relief (APR) from Inheritance Tax on a farmhouse or business property relief (BPR) as a farmer must be actively farming in the last years of life, a recent Tribunal has confirmed.

These reliefs from Inheritance Tax are very important and failure to achieve them can be very costly on the death of a farmer and so understanding the latest thinking on this matter is important for those wishing to plan their affairs for future generations.

Therefore, the judgement in a recent tax case, Charnley v HMRC makes interesting reading.  In this case, the First Tier Tribunal concluded that in order to gain the benefit of these reliefs, one needs to demonstrate clear evidence to show that the “farmer” is actively farming in their final years of their life which is not always easy for very elderly people.

In this case, HMRC argued that the farmer in question, Thomas Gill, had let his land on grazing licences and was therefore no longer actively farming, while Mr Gill’s executors maintained he had continued to actively farm until his death.

The Tribunal concluded that by undertaking the day-to-day husbandry of the grass and animals, even though the animals belonged to someone else, Mr Gill had been actively farming, so the farmhouse qualified for Agricultural Property Relief (APR) and the machinery for Business Property Relief (BPR).

Therefore, it seems the deceased needs to have been undertaking positive husbandry of the grass and livestock as a farmer in the last two years of life to achieve full relief. If they do not, while the land could still qualify for full APR on its agricultural value, the house and any other business assets would not qualify for APR or BPR.

Jeremy Moody, secretary and adviser to the Central Association of Agricultural Valuer has commented that, “The work undertaken needs to be farming husbandry, not just maintenance of property like fences, hedges, ditches and gates. Other cases have failed on this point. Had Mr Gill – for health or other reasons - not been managing the grass and looking after the stock grazing his land; despite not owning them, it is likely that he would have been found not to be farming and so not eligible for APR or BPR on the house and machinery.”

Good evidence of husbandry should come in the form of contemporary records, invoices, field books and witnesses to the facts, he adds. “In this case the grazier’s testimony as to what actually happened on the ground was critical – summarising it as Mr Gill farming his land using the grazier’s animals.”

So, anyone wanting to ensure their estate is eligible for APR or BPR should take advice to make sure they are conducting their affairs in a compliant manner and if not, prepare their affairs for the tax liability which is likely to arise on death.

For further information, contact James Stephen, Partner (james.stephen@carterjonas.co.uk / 01823 428860), or your local Carter Jonas office.