The recent consultation paper published by the Government on the Retirement Scheme has probably shown that this is not going to be a scheme for all.
Having had a number of weeks to digest the content and also experience the questions asked by Farmers, Tony Rimmer, Director of Rostons, details below some key facts to consider.
How much will I get?
You will get 2.35 x your 2018-2020 average payment, subject to a maximum £100,000
When can I apply?
The anticipated period for applications is early 2022.
What must I do to qualify?
You must completely retire from farming and this not only applies to the oldest Partner in the Partnership that is claiming but to all Partners.
What does this mean?
Once you have taken the retirement scheme, the businesses entities cannot claim any future payments or support payments other than some certain exceptions.
You will need to consider not only the tax implications of the lump sum but also the implications from a capital taxation point of view if you have taken the lump sum and in the future either die or sell land. Your eligibility for Agricultural Property Relief on the Farmhouse or indeed the ability to take Entrepreneurs Relief will be affected.
When will we know the rules?
We anticipate detailed rules being published this Autumn.
We would urge all of those considering this scheme to take advise from either their Local Chartered Surveyor/Land Agent that has knowledge of this scheme or their Accountant.