Entitlements – don’t miss the capital losses

Farmers who have bought or inherited beef, sheep, other entitlements or quotas should establish their capital losses to use against future gains.It is surprising to see how many farm accounts still carry entitlements or quota as an asset on the Balance Sheet at cost when they’re now worthless.It is also surprising how many clients have inherited the values of entitlements from parents on death or have been gifted in lifetime and no account is taken of the value on the acquisition, nor loss now.Capital losses can be carried forward indefinitely and used to reduce future capital gains that are chargeable.  They do not get wasted when small gains are covered any way by annual exemptions.The figures may be relatively small, but can be more significant with  larger farm holdings.  Care is needed not to spend too long looking at this, but attention to detail can be useful.Looking at any information held in the accounts or on the original BPS or quota entitlement paperwork will be important, for the cost or value of any entitlements purchase or inherited.