Farmland investment controversy grows
An growing trend of buying up farmland to avoid tax is pricing out locals in rural areas and could potentially drive the government to lift the IHT exemption on farms, advisers have warned
Karl Hartey, managing director for Cheshire-based Applewood Wealth Management, said the rise in farmland purchases by wealthy city investors was “another example of tax avoidance” and could lead HM Revenue and Customs to scrap the inheritance tax exemption on farmland and farmhouses.
He said: “We have plenty of farming clients so there is a concern that city money is buying up farms and small holdings to offer against IHT as happened with forestry.
“This prices out the locals and with the situation already challenging for farmers, they could do without the threat of being taxed on a farm which has been in the family for generations.”
His comments followed news that HMRC is poring over claims for IHT exemption on farmhouses in response to fears that demand for rural plots is rocketing.
Mr Hartey said: “Those who can pay tax are using avoidance planning which once again affects the normal man on the street.”