Recent changes in the political landscape have caused a shift in the agricultural market and a resurgence in ‘rollover buyers’ who reinvest tax gains into qualifying assets, predominately farmland.
Having more than 20 years of experience in this sector, I have been carefully analysing the market in recent weeks in the wake of the UK referendum on membership of the European Union; together with our experienced agricultural specialists here at Pygott & Crone. Brexit has had a direct impact on land prices; the price of land initially rose and has now plateaued, triggering a new breed of buyer in the agricultural market.
The last quarter has been a really interesting time for professionals working within agriculture land sales. ‘Rollover’ is a relief from paying capital gains tax; anyone who obtains planning permission on their land which is then sold for development can still delay paying the tax and can roll over the capital gains tax liability over into a qualifying assets and in most cases existing farmland qualifies.
Lincolnshire has always been an area where land is traded frequently but now the capital gains tax windfalls secured through land purchases provide a safe haven for capital in uncertain times. Agricultural land not only offers generous tax breaks and is also exempt from Inheritance Tax after two years if it is actively farmed. My team has identified an influx in people buying and selling land following the introduction of the National Planning Policy Framework (NPPF) which outlines the government’s plans to allocating more land for housing developments. The value of land has risen sharply in the last 5 years and land is still being seen as a safe investment for those who can afford it.
The opportunity to reinvest into assets has always been there, but never before has there been such an opportune time to make the most of it
There has been a definite shift in activity since Brexit, and the impact this has had on the strength of the pound. Coupled with the NPPF framework identifying more land for housing development, land owners are seeing an opportunity in the market that is too good to miss. To avoid paying capital gains tax on development land sales, more landowners are reinvesting the gains back into land across the Midlands and throughout Lincolnshire where the land is both fertile and affordable. The opportunity to reinvest into assets has always been there, but never before has there been such an opportune time to make the most of it. I suspect the trend in buying and selling land in the Midlands will continue into 2017 and the next financial year.
Lincolnshire will remain an affordable place to buy and sell land and has some ideal sites for residential development. Now’s the time to consider how your assets can work for you, so why not give us a call on 01529 414555 to discuss your options further.
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