Tax relief for entitlements

UK - Farmers may soon be able to claim business assets rollover relief when they buy or sell single farm payment entitlements, according to a new Inland Revenue ruling.

Farmers will be able to defer capital gains tax if they make money on sale of entitlements, said Susan Shaw, tax director at accountant Smith & Williamson.

But only if the proceeds are used to acquire a replacement asset used for the purposes of the same or a successor trade.

"This announcement was expected, but official confirmation is welcome. It also suggests that we may soon look forward to definitive tax advice about the SFP, which was scheduled to appear in a Revenue tax bulletin in January."

Source: FWi

9 March 2005