On the face of it a cut in the headline rate of Capital Gains Tax from 40% to 18% looks generous. However, the shocking reality for some farmers is that the tax they will pay on a farmland sale from next April could more than quadruple.

Mark McAndrew, head of Farm and Estate Sales for Strutt & Parker explains: ‘Most farmers are used to paying 10% tax on the gain in value above an index linked 1982 base. From next April, not only is Business Asset Taper Relief removed but so is Indexation Allowance. Indexation has been especially valuable to farmers because of the relatively high value of land in 1982.’

McAndrew calculates that in round figures, the tax typically paid by a farmer on the sale of 100 acres will rise from £10,000 to £45,000.

McAndrew concludes: ‘If you are planning to bring farmland to the market next year, you ought to consider carefully bringing that forward to this autumn. A good agent should be able to help the vendor weigh up the pros and cons of bringing forward a sale in a rising market’.

‘The treasury proposals are at best unclear and we would hope the Government could be persuaded to change direction before they become law. We shall of course be lobbying for this.’