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The impact of the new rules that will allow farming profits to be averaged over five rather than two years.
KEY POINTS
- Finance Bill 2016 extends the ability to average farming profits from two to five years.
- Marginal relief is abolished.
- A volatility test must be met for averaging to be allowed.
- Averaging may not be allowed in some cases.
- Averaging may not be beneficial for every member of a farming partnership.
- Detailed long-term records and annual reviews or liabilities will be required.
The start of the new tax year brought with it various legislative changes to the system one of them being the introduction of five-year farmers’ averaging. With effect from and including the 2016/17 tax year farmers now have the choice as to whether they average their profits over five years
two years or not at all instead...
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