Members of Angus Cereals purchase both share capital (at £1 per tonne) and storage rights as part of their overall commitment. Through member annual service charges, Angus Cereals repays external bank funding, followed by the members’ qualification loans. This process converts the capital commitment of members into income tax deductible expenditure as a deduction against trading profits, and therefore 100% tax relief is secured.
The rules regarding tax allowances are ever evolving, and any significant on farm capital expenditure should bear in mind current tax rules and those to be applied in future years. In the past significant tax relief was available for agricultural buildings but current Government policy is focussing tax reliefs away from direct capital expenditure.