| Institutional investors have been buying agricultural land | | | | would incur a tax bill of £20,000, whilst the same |
| for years due to the sustained increase in demand for | | | | profit generated from the sale of a farm, of working |
| food, feed and fuel, and lack of supply of good land. | | | | farm land, would incur a tax bill of only £9,000, |
| This has ensured that UK farm land investment has | | | | meaning that the same profit would leave the farm |
| returned an annual average of around 10% in capital | | | | land investor better off by £11,000. |
| growth, whilst also allowing investors to capture | | | | All of that of course is a sideline to the fact that UK |
| income in the form of rent charged to farmer working | | | | farm land has increased in value every year for ten |
| the land. | | | | years at an average ate of about 10% according to |
| Agricultural land investment in the UK also provides | | | | the Royal Institute of Chartered Surveyors, and is yet |
| investors with a number of tax planning advantages | | | | still only half the price of farm land in Ireland, Holland |
| such a IHT relief and business relief, now we can add | | | | and Denmark, leaving a huge margin for growth, not to |
| Capital Gains Tax to the list of advantages that UK | | | | mention the income stream created by renting the land |
| farm land investment has over the more traditional | | | | to a farmer (we are achieving 7% per annum in 2010). |
| residential buy to let model. Arable land, when rented to | | | | When you take into account the associated costs of |
| a farmer who works the land, qualifies as a business, | | | | buying running and selling a buy to let property n the |
| and therefore will fall into the lower band of Capital | | | | UK, and add the 40% tax bill at the backend, it would |
| Gains Tax under the new Lib/Con Government. | | | | seem that an investment into UK agricultural land |
| So what does this mean for investors? Well in the | | | | would make a much more sensible choice for the |
| most basic terms, it means that a profit of £50,000 | | | | investor hungry for growth, income, and a fair deal on |
| generated from the sale of a residential property | | | | tax. |