Tag Archives: farmers
Farmers Land Carbon Credits
Changes to how land sector emissions are reported under the Kyoto Protocol are expected to benefit farmers and rural landholders who will gain greater access to Australia’s carbon markets. The changes announced in the 2013-14 Budget will see the Government formally account for cropland management, grazing land management and revegetation in its national greenhouse gas inventory. Parliamentary Secretary for Climate Change, Industry and Innovation, Yvette D’Ath said the decision meant when a landholder stored carbon in soils or vegetation, their efforts would count towards Australia meeting its national greenhouse gas reduction target. Ms D’Ath said the changes would mean methodologies developed under the Carbon Farming Initiative (CFI) which covered those activities would be able to generate Kyoto-compliant CFI credits. She said since businesses with obligations under the carbon pricing mechanism could buy and surrender those as offsets against their liabilities, participating farmers now had new buyers for abatement projects on their land. “This is a win for everyone,” Ms D’Ath said. “Liable firms will have more flexibility in how they meet their obligations and farmers can now benefit from new buyers and greater access to Australia’s carbon markets.” She said accounting for those land sector emissions would broaden the base of the CFI, and, by extension, Australia’s carbon pricing mechanism. “A broad base will reduce the overall cost of Australia meeting its international emissions reduction commitments,” she said. Edition 361f, 17 May 2013 Continue reading
Budget To Cost Farmers Inheritance Tax
09-05-2013 14:32 PM With almost every Budget delivered by a Chancellor, it is fair to say that the devil is in the detail rather than in the speech itself. The 2013 Budget was no exception. Hidden away in a Press Release issued after the Chancellor sat down was the intention to introduce legislation preventing the claiming of Inheritance Tax Relief on some loans. Whilst initially the approach does not seem unreasonable, a closer reading uncovers that these rules also have the potential to impact on those who have taken out loans to acquire assets that qualify for Business Property Relief and Agricultural Property Relief. For many years, owners of Farms and Landed Estates have looked to secure borrowing against assets which do not qualify for other forms of Inheritance Tax Relief. Classically, borrowing has been kept away from assets such as land that qualifies for Agricultural Property Relief and has been secured against investment assets, such as let property, where no Inheritance Tax Relief is available. It seems that HM Revenue & Customs are now proposing that a loan should only be deductible against the asset it was used to acquire when assessing an individual’s estate liable to Inheritance Tax. This means that if the purpose of taking out the debt was to acquire a block of land, the debt is deducted from the value of that land when calculating the value of a person’s estate, even if the land also benefits from Agricultural Property Relief. This move is likely to have significantly more effect than it would have done a generation ago given the amount of diversification that has taken place on a number of farms. Assuming that this proposal finds its way into legislation when the Finance Act receives Royal Asset, which is likely to be in July, owners of farming businesses would be well advised to revisit any Inheritance Tax planning they have already undertaken. Unlike other transaction based taxes, the liability to Inheritance Tax tends to ebb and flow as personal circumstances change. Therefore, regardless of this most recent proposed amendment to the legislation, it is good practice to regularly review both your Will and Inheritance Tax planning to ensure they are up to date and effective. Continue reading
