Some Recent Developments In Taxation

What were the key items in this year's Budget for farmers and landowners?

Inheritance tax (IHT)

The ability to offset loans against assets chargeable to IHT on death is to be restricted - this came out of the blue and will not be subject to consultation. It has been common practice for many years for the borrowing used to acquire assets that will qualify for IHT business property relief or agricultural property relief to be secured against other assets that will be liable to IHT. For example, when making a loan to an individual for the purpose of buying a new business the bank may prefer to take a charge against the family home. The new rules will require the borrowing to be matched with the asset acquired, thereby resulting in potentially significant extra IHT liabilities for farmers and business owners.