Consequential Amendments

Part of Orders of the Day — Agricultural Tenancies Bill [Lords] – in the House of Commons at 6:11 pm on 19th April 1995.

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Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown , Cirencester and Tewkesbury 6:11 pm, 19th April 1995

I am grateful to my hon. Friend.

There are two other tax impediments that may inhibit landlords in letting land. The first one is income tax treatment. Vacant farms come under schedule D and are treated as a trade. Let farms come under schedule A and are treated as an investment. The reliefs that are available under A are much more limited than under D. I hope that my right hon. and learned Friend the Chancellor of the Exchequer will give consideration to the equalisation of tax treatment.

The second tax anomaly that will inhibit landlords in letting farms is treatment under capital gains roll-over relief. Again, there is different treatment for let and vacant farms. Perhaps my right hon. and learned Friend the Chancellor will consider whether that anomaly can be overcome.

I look forward to speculating on what the Bill, when enacted, will do. I would like the situation in the commercial property letting market to apply, whereby let commercial properties are worth the same—in many instances they are worth more—as vacant properties. That would be entirely healthy for agriculture. It would mean that let land and vacant land values were more nearly the same. At present, there is a 50 to 75 per cent. differential. I should like values to come much closer together, and that is possible.

I was discussing the Bill with some large institution farmers. They are beginning to have some exciting ideas about how institutional money might be put into agricultural land. Under the Bill, they would have the certainty of getting vacant possession at any time they wanted it. They would be able to let land to new, young entrants into farming. I hope that they would do so, for that is precisely what we want to see. I hope that that will happen because at this moment some agile minds are considering how it might be achieved.