Rewilding projects could lose out on tax relief

A leading financial adviser has warned that large-scale re-wilding projects could lose out on a major tax concession covering agricultural land.

“In order for land to qualify for Agricultural Property Relief (APR) it needs to be used for the purposes of, “agricultural production, along with other requirements,” said Peter Harker, a partner with tax specialists Saffery Champness.

“When land is taken out of agricultural production for environmental schemes there is a real risk that in many cases this will mean that the landowner will lose the availability of Agricultural Property Relief,” he added.

Harker explained that in the past there had been many schemes established to support farmers in making their land more supportive of biodiversity and other specific habitat creation – but he added that relief had continued to be available as the land set aside tended to make up only a small minority of the land being farmed.

Peter Harker

But he said that while some landscape scale schemes might require agricultural elements such as grazing, this was not universally the case and in some cases environmental land management was the major land use, rather than being ancillary to agricultural production: “This issue is of real concern for a number of landowners who wish to embrace various environmental schemes, but also do not want to lose the availability of APR.”

He acknowledged that Business Property Relief might cover some for inheritance tax, but he said that for those with tenanted farmland and those wishing to access holdover by virtue of the land, concerns remained over qualifying for APR.