If you are considering selling your Fishery in the near future you will need to be aware of significant changes to the Capital Gains Tax System which the H M Revenue and Customs 2007 Pre-Budget Report has announced. 

Fishery owners need to carefully consider how these changes could affect a Capital Gains Tax Liability to establish whether it is beneficial to complete a disposal before or after 6th April 2008. 

Summary of Changes: 

1. A single rate of 18% to be applied to gains

2. Withdrawal of taper relief

3. Withdrawal of indexation allowance

4. Calculation of gain on assets held on 31st March 1982 to be made using their market value on that date instead of cost. 

The reforms affect individuals, trustees and personal representatives but not companies and apply to any disposals made on or after 6th April 2008.

In a recent appeal ruling Planning Inspector Chris Turner rejected plans for a house to be used by the manager of a fishery in the Derbyshire green belt on the grounds that there was no functional need for somebody to live permanently on site.

The appellants argued that someone needed to live on the land to ensure the security of the fish stocks because alternative methods were too expensive and would not provide the same degree of security.  The Inspector noted PPS7’s advice that the protection of livestock from theft or injury may contribute to the need for a dwelling, but he did not accept that this was sufficient justification by itself.  The Inspector commented that police evidence did not state that a dwelling was the only means of improving security.

The Inspector also doubted the business’s ability to afford the construction of a dwelling.  He foresaw a significant risk that the business would fail, leaving a new dwelling in the countryside.  He felt that this would increase pressure for residential use to become unencumbered and available for sale on the open market.  As there was no functional need and the financial position of the business was unproven, he dismissed the appeal.