THERE is a real risk that rewilding will threaten availability of Agricultural Property Relief, says Saffery Champness.

“To qualify for Agricultural Property Relief land needs to be used for the purposes of ‘agricultural production’, along with other requirements but if it is taken out of agricultural production for environmental schemes there is a real risk that in many cases this will mean that the landowner or farmer will lose the availability of Agricultural Property Relief,” says Peter Harker, Partner, Saffery Champness.

In the past, many schemes have been established to support and incentivise farmers who make their land better for biodiversity or for specific habitat creation. Capital tax policy in the past has seen certain schemes either named in the legislation or relief has continued to be available as the land set aside makes up a small percentage of the total land being farmed and as such, no restriction on relief has been required.

However, going forward, landscape scale schemes are needed and are being encouraged to make significant inroads into flood management, soil regeneration, habitat recreation and biodiversity protection and enhancement. Some of the schemes will allow an element of agricultural occupation to continue, for example where grazing is required as part of an accelerated rewilding project.

Many projects, however, are likely to fail to meet the current definition of agriculture and therefore continued access to capital taxes relief will fail also. There will be farms where environmental land management is the major land use, rather than this being ancillary to agricultural production.

Peter Harker says: “This issue is of real concern for those farmers and landowners who wish to enter new environmental schemes, but also do not want to lose the availability of APR. For some, this is providing a block to committing to some of the new schemes available under ELMs.

"The CLA and professional advisers such as ourselves are actively lobbying government to review and address this issue as this could prove to be a major disincentive with regard to uptake of new schemes and ultimately to the achievement of ambitious climate emergency targets.

“From an inheritance tax perspective it may still be possible to gain relief on the land value in question where Business Property Relief is available on the wider landholding. However, for those with tenanted farmland and those wishing to access holdover relief by virtue of the land qualifying for APR there are still genuine concerns that will remain until we receive clarification from government.”