UK: Rural Update - Autumn 2012

News in brief

• Building materials and construction services supplied in connection with approved alterations to listed buildings, which previously qualified for zero rate VAT, will now be subject to VAT at the standard rate. The measure was announced in the 2012 Budget and will have effect on supplies made on or after 1 October 2012, but transitional arrangements are already in force. The change will bring the taxation of approved alterations to listed buildings in line with repairs and improvements which are already subject to VAT at the standard rates.
• As a result of the March Budget, the purchase of residential properties valued at over £2million is subject to SDLT at a rate of 7% for individual purchasers and 15% for corporate purchasers. It is also proposed that, from April 2013, a so-called annual 'mansion' tax will be charged on residential properties held within a corporate structure, at a set tariff, depending on the value of the property. Some good news is that these changes will not apply where a company is acting as trustee or nominee. The current exemption from capital gains tax for non-UK companies will also be removed where offshore companies own residential property. This is likely to extend to non UK trust companies or coporations. Those with residential property held via a corporate structure may wish to review those structures before April 2013.

Headstone headaches

The ownership and maintenance of monuments situated within a church or churchyard, falls within the Church of England's own system of planning control, the Faculty Jurisdiction. A faculty is a permissive right to effect some alteration to a church building or its contents, including 'monuments' such as tombs, gravestones or other memorials, and any kerb or setting forming part of such a monument.

A monument set up, or even built into a church, does not become part of the freehold of the church, and is not owned by the church warden or Parochial Church Council. Faculty Jurisdiction Measure 1964 s.3(4) specifies that monuments within a church or churchyard are the property of the people who erected them during their lifetime. Thereafter title to a monument descends to the heir at law of the person in whose memory the monument was erected. Interestingly, this is despite the fact that The Administration of Estates Act 1925 abolished succession through heirs at law in other respects.

It is unclear what interest Faculty Jurisdiction Measure 1964 s.3(4) creates, but it is likely that it is equivalent to an entailed interest. As this type of interest must pass automatically to the owner's heirs at law on his death, it is not an interest that can be assigned to another except 'pur autre vie', that is to say for the duration of the donor's lifetime, after which time the monument will vest in the donor's heir at law.

Therefore where the maintenance of a monument becomes prohibitively expensive for the owners, gifting the monument to a third party or trust may not be an option. A third party such as a charity may be reluctant to accept a gift of a monument laden with liabilities for maintenance when the monument has no real value for the charity, as ultimately ownership will vest in the donor's heirs at law upon his death. On the other hand, such a liability contained in someone's estate on death will have unusual inheritance tax consequences, which would need to be considered carefully. An elaborate memorial might, therefore, cause more headaches down the generations than a respectful family would ever have anticipated...

Hard hats and harnesses

Heath and Safety may have a dull image. It may feel like a burden to achieve compliance. It may lead to general friction. But health and safety done properly can save lives and can improve business efficiency.

Anne Davies is a new addition to the Withers office and offers advice on matters surrounding Safety Legislation. Having been brought up on a farm in West Wales she understands some of the challenges and is keen to demystify this area of law. Personal Protective Equipment is the topic on this occasion, and the questions that sensible employers must ask themselves – how many have issued helmets only for them to gather dust? What about gloves – are they just stuffed into pockets?

What are my responsibilities?

Employers have a duty to provide personal protective equipment ('PPE') for use at work, as set out in the Personal Protective Equipment at Work Regulations 1992. Examples of personal protective equipment include safety helmets, coveralls, gloves, safety footwear, eye protection and safety harnesses. In fact, PPE is an umbrella term for all equipment which is intended to be worn or held by persons at work and which protects them from one or more risks to their safety.

Have I satisfied my obligations simply by providing PPE?

No. Before providing PPE at the workplace other safety measures must be considered. The employer must seek to control risk to workers by other means which are equally or more effective than PPE. A good idea is to involve workers in the reviewing process, such as a Risk Assessment. If other means cannot control the risk then PPE needs to be provided but only as a last resort.

On occasions it is obvious that PPE is required such as when working with a chainsaw. In other instances, more thought is required such as when working with veterinary medicine or when coming into contact with animals that have recently been exposed to veterinary medicine eg sheep dip.

Once I have supplied PPE, do I have any further obligations?

Yes. The employer must ensure that PPE:

• is suitable for the work that is being carried out and does not introduce additional risks to the worker, such as affecting visibility
• is capable of fitting the wearer correctly
• is stored and maintained correctly
• is CE marked to show that it has been made to an appropriate standard.

Employers must also ensure that workers know how to use, and are using, the equipment correctly by receiving suitable information, instruction, training and enforcement of use eg safety and warning signs. If an employee persistently fails to use PPE as provided then disciplinary action should be considered. It should also be borne in mind that employers cannot charge workers for PPE.

A Lincolnshire Landscape Gardener was recently successfully prosecuted for breaching the PPE regulations. No incident occurred and no one was injured but a neighbour saw him inappropriately protected and reported him to the HSE. Neighbourhood watch at its most extreme!

CAP reform update

Negotiations over the new CAP regulations are ongoing. The EU Presidency has published various amendments to the draft regulations and these have been broadly supported by the EU member states, meaning that they are likely to form part of the final deal. The main changes of interest to an English audience are:

• the wording on the transfer of the right to receive payment entitlements on sale or lease of land has been clarified to confirm that the right can be transferred to 'one or more farmers'. This means that there will be no 'golden ticket' problem for multiple buyers from a single seller and farmers selling part of their land need not be concerned that they will lose their own right to claim on retained land if the sale contract contains a clause transferring payment claim rights to a buyer or buyers;
• the blanket rule that subsidies will not be paid to those whose subsidy payments comprise less than 5% of the receipts from non-agricultural activities has been removed. However, new provisions have been added allowing member states to deny payments to those whose subsidy payments fall below the 5% figure and who operate non-agricultural businesses. Examples given are airports, railways, waterworks, sports grounds, hunting estates, fishing/aquaculture estates and camp sites. There is no change to the proposed payment capping provisions;
• the reference years for allocation of new entitlements have been revised to 2010 or 2011, rather than just 2011. This does not help new entrant farmers who did not claim before 2012. However member states operating a regional payment scheme can now opt to keep their existing entitlements in place rather than requiring farmers to apply for new entitlements. If this approach is taken in England it would remove many of the practical problems associated with a change to new entitlements;
• the national reserve can be used to assist not only young farmers but also new entrant farmers; and
• detail has been added to the three different crops rule. A winter and a spring crop of the same plant will count as two different crops (eg winter and spring wheat).

It remains to be seen how the final regulations will look, but these amendments do contain some good news – even if just in terms of providing more clarity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.