Farming Industry Tax Boost is Red-Herring

Braemar Securities promotes investment in British farmland, so heard with interest the news in yesterday’s budget that tax benefits on UK agricultural investments are being extended to those elsewhere in the EU.

Marc Duschenes, CEO of Braemar Group plc believes that the surprise boost for British farmers and investors, allowing EU based farms to qualify for the same tax treatment as British land (Agricultural Property Relief and Inheritance Tax Relief) is a red-herring and may detract investors and farmers from the fundamental benefits of British farming.

Sterling being close to historic lows against the Euro-denominated region is one obvious reason not to follow HMRC’s blessing to invest overseas aside from the distance investment nature but Marc Duschenes points out that British farmland is amongst the most productive in Europe in terms of cropping per acre, and prices remain, in constant currency terms, some 50% below land in other similar northern European countries, including notably Ireland and Denmark.

Political and economic risk is also highlighted by Duschenes as being a significant factor in remaining domestically invested. Certain EU countries require that local investment holding structures must be used to maintain a nationalistic interest.

As a result Braemar will remain focused on farming in the UK, and is optimistic that land prices will continue their long term upwards trends.