Buy land which can diversify into profitable activities
Tom Moran, partner at Charles Russell Speechlys, talks about what to look for when buying or investing in the agricultural sector.
Is arable land a good investment?
Yes. Capital values of agricultural land have increased from a low point in the early noughties, with arable land the most expensive. Agricultural land also currently benefits from Agricultural Property Relief (APR) which enhances the attractiveness of the asset class, and this relief covers pasture as well as arable.
What should UHNW clients look for when buying or investing in the agricultural sector?
Development potential or at least the potential to diversify into a wider range of profitable activities.
Who is investing in agricultural land?
Existing holders of large areas of agricultural land are often the most committed purchasers, seeking to accumulate adjacent or strategic parcels of land over the years. Generally these individuals have made their wealth outside farming and so have the liquid cash to make acquisitions
What are the incentives for UHNW individuals to invest in agricultural land?
Agricultural Property Relief and lifestyle. Agricultural subsidies are up in the air following Brexit. There has been long-running speculation that APR will be phased out or reduced, but for now this significant relief remains in place.
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