Tax and subsidy changes for farms

© iStockphoto/K_Thalhofer

The Department for Environment Food and Rural Affairs (Defra) has confirmed that farmers in England will be able to take a lump sum in 2022 instead of receiving their remaining basic payment scheme (BPS) on an annual basis. The BPS is the main rural grant to help the farming industry with applications between March and May and payments from December (tinyurl.com/ooq5xp3q). Such drastic changes will involve positive and comprehensive tax planning as part of a full succession review. Sadly the details of how exit payments will work remain unclear because Defra is planning to consult the farming industry on the offer. This will include eligibility criteria and calculation. The government’s objective is to phase out BPS payments entirely by 2028 but the exit payment is intended to accelerate the pace at which new entrants join the industry and...