Showing posts with label inheritance tax. Show all posts
Showing posts with label inheritance tax. Show all posts

Sunday, December 09, 2007

Tax and the rich 2

More than a third of Scottish farms sold this year have been snapped up by cash-rich businesspeople anxious to avoid paying inheritance tax .

According to the annual Scottish Estates Review by property agency Strutt & Parker, the number of farm buyers who cite IHT as a reason for their purchase reached 36% this year.

Prime Scottish arable land has now more than doubled in value since 2004, selling for at least £3,500 an acre, compared with £1,600 three years ago. Farmers have traditionally been allowed to pass on their land to their children without the value being calculated for inheritance tax purposes. Any assets above a threshold of £283,000 are normally taxed at a rate of 40%, but farms are excluded so that they do not have to be split up to pay death duties.

But the tax break is now being exploited by wealthy investors.

"These are people with maybe £20m, £30m or £40m and they are looking for ways to shield that money from IHT in the future. They are buying farms and sheltering some of their money that way." Strutt & Parker's farm sales specialist said "You can't let the land go unmanaged but you can employ a manager, so investors don't even need to get their hands dirty."

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