ARTICLE · 15 AUGUST 2022

Farm Diversification – Tax Considerations And Consequences

Lanyon Bowdler

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Diversification can lead to new sources of income, and may also be an attractive business project for younger generations of farming families looking for long-term financial stability.

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Diversification can lead to new sources of income, and may also be an attractive business project for younger generations of farming families looking for long-term financial stability. With the number of UK residents opting for ‘staycations' since the COVID-19 pandemic, diversification has become an increasingly desirable tool for farmers and land owners to access new means of revenue. However, diversification can have a negative impact on your inheritance tax (IHT) position and could exclude the availability of valuable IHT reliefs. Before making any changes, it's important to consider what tax implications might lead from diversification, to ensure your family doesn't end up with a large and unwanted tax bill in the future.

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