Trust Registration Service - The Latest Guidance for Farming Partnerships

Introduction

Despite September 2022 being long gone there are still many farming partnerships that have not yet registered partnership property that is held in trust with the TRS.

There are also many farmers and farm advisers who do not understand the concept of ‘partnership property being held in trust’ and have therefore ignored the various warnings and the lack of registration is due to lack of clarity.

In fairness, the initial HMRC guidance was possibly misleading with a focus on partnership agreements rather than an explanation of why the registration and to whom the registration applied.

All partnership property is held in trust but there are some exemptions from the registration - the lawyers should define this through an updated partnership agreement.

As a result, HMRC have taken a ‘soft approach’ to penalties, however, with the two-year anniversary of the start of registration of partnership property approaching, there is an overwhelming need to check the ‘trust’ status of every farming partnership now.

Many farm advisers acting for agricultural partnerships have rather avoided the subject of TRS registration for partnership property and have not made full warnings to clients, which is risky with penalties looming.

This virtual classroom seminar explains a working strategy for those advisers who are behind with registration and uncertain of some confusing areas of understanding.

There are incorrect partnership accounts regarding ownership in existence.

The session looks at the immediate need and advantages for understanding, warning clients and registering with TRS as applicable and taking the advantages of the evidence of 100% Business Property Relief (‘BPR’) for inheritance tax.

What You Will Learn

This live and interactive session will cover the following:

• How and why is farm partnership property held in trust? The need for legal clarity
• Partnerships cannot legally own property - hence the need for the trust
• Legal title v beneficial interest - the need for legal understanding
• The role of the partnership agreement in defining the trust
• The need to urgently clarify/update the partnership agreement
• Partnership property - the need for a partnership agreement
• The advantages to registering partnership property held in trust with TRS
• The TRS registration benefit of the 100% BPR
• 100% BPR protection over 50% BPR
• Do the TRS registration rules still discourage partnership agreements?
• Complex varying property ownership within partnership - more than one registration?
• Will TRS registration encourage more incorporation and R&D relief at 130% - working with both entities?
• Will TRS registration discourage move from sole trader?
• Disadvantages of incorporation of the family farm
• Disadvantages of sole trader for the family farm
• The need for TRS registration to be part of full farm succession planning
• Accounts disclosure of the trust and land capital accounts - accounts rectification if appropriate
• Accounts disclosure with no partnership agreement
• The need for good notes to the accounts for disclosure clarity
• The risk of not understanding Land Capital Accounts in the TRS context
• Farm cottages and the need to consider TRS - partnership property Balfour advantage
• Furnished Holiday Accommodation - the tax advantage eliminated BUT not in Finance Bill
• The interaction of tenancies with TRS

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.