Farming Partnerships & Accounts Disclosure - The Risks & Pitfalls Explained

Introduction

This course will consider how to present farm accounts in an efficient way for farm tax advisers

Many farmers (and their advisers) dismiss partnership accounts as simple income and expenditure accounts to help agree January and July tax payments. However they can be evidence as to ownership of £multi-million farm partnership property and influence capital taxes.

The disclosure for relatively small amounts of income tax can have defining implications for capital tax relief. With farm values being high and farm development monies being so significant, the IHT and CGT implications of mis-disclosures or mistakes in farm partnership accounts can cause significant problems. This course will include an emphasis on the importance of the accounts for protection regarding CGT, IHT, Probate and farm disputes.

This new full day course will help you to understand the full complexity of the tax and legal implications of farm partnership accounts so as to ensure that your farming clients are fully protected from the risks and pitfalls of inadequate accounts.

What You Will Learn

This course will help you to understand the full complexity of the tax and legal implications of farm partnership accounts so as to ensure that your firm and farming clients are fully protected from the risks and pitfalls of inadequate and/or misleading accounts have on capital taxes:

• The need to consider partnership property held in trust and registration - TRS - impact on accounts
• Farm Basis period reform under MTD for income tax
• Importance of the farm accounts disclosure when no partnership agreement and need to identifying partnership property and intentions
• The significance of 100% BPR for IHT on partnership property compared to 50% non partnership property
• CGT on disposals - cessation (partnerships property) v withdrawals (non partnership property) for maximising entrepreneurs relief
• Misunderstandings of the difference between partnership property and jointly held property by farming partners and advisers
• The useful indications from farm partnership accounts in dispute cases - discussions, mediation and the courts
• Ham v Bell judgment re evidence of partnership/non partnership property and errors by accountants
• Accounts as evidence of the partners intentions
• The power and necessity of the "land capital account" for freehold property protection and understanding valuations - Foster
• The significance of the approval of the accounts for the 'wet signature' in formal partners meetings with strong minutes
• Protection consideration around farming partners 'signing in the cloud'
• Unregistered partnership land and evidence from the accounts
• Evidence of freehold property disclosure and supporting workings
• Link of accounts freehold property and improvements working papers to CGT base cost control and need for the partners to understand
• The need for clear disclosure notes to the farm accounts, for easy cross reference to enable partners to understand the detail of accounts
• FRS102/FRS 105 disclosure requirements and impact on the partnership
• The need for those drafting farm wills to have access and understanding of the farm accounts and exactly what is owned
• The intention of the accounts in Ham v Bell
• The significance of partnership accounts information for completion of the IHT 400 and supporting schedules on probate
• The importance of partnership profit shares, drawings and overdrawn current accounts on various legal and tax aspects of the running of the partnership
• Impact of MTD for VAT on all angles of farm accounts
• The complexity of partnership farm diversification on VAT status (zero, exempt and standard-rated) with key understanding of the resultant accounts disclosure
• Farm stock valuations (HS232) including the herds basis and accounting on impact
• The future of farming with the BPS being phased out and the Agriculture Bill impact
• The need to show the clarity of trading activity over investment activity re Vigne, Graham and Bell
• The disclosure of agriculture tenancies