Are solar PV arrays taxable?

The solar PV arrays do present particular problems. Obviously, ‘solar farming’ is not farming as understood by the tax system. Farming is defined, for income tax, as ‘the occupation of land for the purposes of husbandry’ (s996 Income Tax Act 2007). This definition is generally used for the purposes of other taxes such as CGT and IHT.

Are solar farm developments a tax issue?

In this article, Nicola Parkinson and Kathryn Brook, specialist lawyers from Walker Morris’ Tax and Infrastructure & Energy teams respectively, highlight potential tax issues associated with solar farm developments.

Can a trustee pay tax on a solar farm?

While land held in a discretionary trust will be subject to ten-year anniversary IHT charges at a maximum of 6 per cent, the tax can be paid in instalments over a ten-year period and the higher income streams from the solar farm generally mean that trustees are in a position to accumulate income to use for payment of the tax.

Are solar farms a good investment?

Solar farms have become a particularly attractive option in recent years as rural estates look to diversify and increase income streams (see Patrick Hammond’s article here). However, turning large parts of an estate over to solar can have significant Inheritance Tax (IHT) consequences which must be considered at the earliest stages of the project.

Are solar farms a viable option for rural estates?

Solar farms have become a particularly attractive option in recent years as rural estates look to diversify and increase income streams.

Will solar farms affect the value of land subject to IHT?

The value of the land subject to the solar farm will also increase, probably as soon as planning permission is granted if not before. This article examines possible solutions to mitigate or eliminate the detrimental effect of solar farms for IHT.