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The move towards diversification in agriculture is expanding the traditional range of uses for rural property. Farm business tenancies can now be structured to allow non-agricultural uses without losing the agricultural framework of landlord and tenant obligations. Freedom to set the length of these tenancies, without conferring lifetime security, makes them a flexible medium.
It is becoming easier to get planning permission to convert redundant agricultural buildings to commercial uses. From April 2004, a significant capital gains tax problem will be eased, when business taper relief is extended to gains arising on most property used for business purposes, whether by owners or by tenants. However, the loss of agricultural property relief from inheritance tax remains a problem for buildings taken out of agricultural use.
As well as agricultural and commercial uses, landowners are involved – in suitable areas – with forestry, mineral extraction, windfarms and country sports. Sometimes the owner conducts these activities himself, but they can also involve options, leases, licences, partnerships and joint ventures.