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Just a note to let you know how we have enjoyed reading Practial Farm Ideas. It's one of the best farm magazines we have had for a long time and will pass it around for our friends to read - it's so interesting that you just can't put it down. Keep up the good work!

S.J.Perry, Exeter

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Will the farm now be your retirement fund?

Chancellor Darling's CGT changes will have a profound effect on the way people invest. Building up a business over many years with the long term objective of selling it on to either a relation or a younger person all of a sudden becomes far less attractive. Nearly one-fifth of the value built up will be taken in tax, and this of course is after business, pay-roll and VAT taxes have been paid along the way.
    It is heinous in comparison to inheritance tax. For this tax increase hits the living, in particular the living who have made long term plans which fully factor in taper relief. It hits the very ethic which the government has preached since it came to power, that is, applauding and rewarding those who invest long term. It simultaneously rewards those whose strategy is a quick a buck, and in-and-out gamble, the chancers in life.
     The situation for farmers is gruesome, as many draw minimal income from businesses, but live for the day when the farm is sold and a changed into a pension fund. It's a big asset, and often the only one they have for their pension. As most farms are owned for a 20 years and more, taper relief and indexation are very significant. Here at Farm Ideas www.farmideas.co.uk we're already exploring ways farmers (and maybe this would apply to other chunky capital owners) can alter their plans to help off-set the problem. It's not going to be easy. We should give the chancellor our muck-spreader award for the worst piece of financial legislation... ever! It will erode long term investing, discourage entrepreneurial talent, benefit in-and-out investors.
    There's a super-clear explanation on   http://www.fool.co.uk/news/your-money/tax/2007/10/11/a-tax-bombshell-for-investors.aspx?source=ioowftxt0010011