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Chapter IHTM24254

Document Cited authorities 1 Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM24254
CourtHM Revenue & Customs

The Single Payment Scheme was introduced by the EU to replace a wide range of farming subsidies under the Common Agricultural Policy and break the link between subsidies and agricultural production.

The Scheme came into force on 1 January 2005. Entitlement to the annual Payments was to be established by individuals who applied by May 2005, and once obtained such entitlement could be bought and sold in the open market, thereby acquiring a value.

The significance of this from an agricultural relief point of view is that:-

Although entitlement could only be held by, and sold to, persons registered as “farmers”, this definition could cover many who would not be “occupying for the purposes of agriculture” for Inheritance Tax (IHT). Therefore, mere entitlement to Single Payments is no guarantee that s117 IHTA is satisfied in respect of the residence of the holder

For the purposes of the Single Payment Scheme agricultural activity is defined as meaning ‘the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes or maintaining the land in good agricultural and environmental condition.’

Therefore a claimant can qualify for the payments by keeping his land in good agricultural and environmental condition (GAEC), but the claimant does not have to be in active agricultural production.

The requirements of GAEC cover a number of management objectives for qualifying land, which must be met, including soil management, maintenance of habitat and landscape features, and protection of hedgerows and watercourses. The provisions for eligible land which is not in agricultural production (GAEC 12) lays down the minimum standard of farmland management consistent with being paid the single payment. As a minimum the land should be kept in such condition to allow an Inspector to identify it and inspect it - to enable the Inspector to be able to measure, walk and identify any...

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