A lack of understanding of how ownership works within farming partnerships can lead to costly and stressful complications during events like disputes, retirement, or bereavement.
With the restriction on agricultural and business property reliefs (APR and BPR) for inheritance tax (IHT) with effect from April 2026, many farm businesses are reviewing their structures, exposing the tax implications of past inaccuracies.
Historic errors often persist, even when partnerships change, typically stemming from outdated assumptions about what is partnership property and what is personally owned.
Partner, Jonathan Stephens, features in the article talking about the importance of land capital accounts, specifically partnership property.
Jonathan quotes ""People don't realise that when land is introduced as partnership property, it is partnership law that regulates who owns the value of it. The way ownership works in a partnership is that you look at how the proceeds are divided if it was wound up."
Read the full article here.