DEFRA confirm removal of farm subsidies for solar

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News article

Defra confirm removal of farm subsidies for solar parks

October 2014

solar park
The Department for Environment, Food and Rural Affairs (Defra) announced on 20 October that payments under the CAP for land underneath solar farms will cease in the New Year.
 
Environment Secretary Liz Truss announced plans to axe the taxpayer subsidy to farmers and landowners for the schemes to try and discourage solar park development. However, well sited solar parks are not in conflict with agriculture or food production as they should be sited on grade 3b land or worse which is most suitable for permanent pasture and sheep farming.
 
Harry Edwards from Fisher German comments “The planning process should ensure that solar parks are well sited, and therefore not on the best arable land, whilst also ensuring that biodiversity measures are promoted. A solar park is temporary and gives the land a break from intensive farming.
 
The guidance on whether, and to what extent, the subsidies have been available for solar parks has been unclear over the last few years. However regardless of this we have always recommended that farmers and landowners assume they do not claim single farm payments (SFP) on their fields which are subject to solar PV development.
 
The risks have been high because although a slightly reduced payment has potentially been available, the risk of an over claim which could then affect the overall landholding entitlement has in our opinion been too great. Therefore we have advised clients that they should base the proposal for a solar park on not claiming for the payments, and the consensus has been that the rent sufficiently compensates for the loss of subsidy; this announcement should therefore not be a shock to the industry.”
 
The removal of the SFP emphasises that landowners also need to be aware that they will also not get 100% agricultural property relief (APR) for inheritance tax on death or a transfer as the main use of the land is no longer agricultural, but there will be potentially a 40% charge to inheritance tax if the landowner is only collecting a rent and not running the solar project themselves.
 
For further information please contact Harry Edwards on 01858 411204 or email harry.edwards@fishergerman.co.uk
 
 
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