Listening to Radio 4, I am very concerned that Peggy Woolley has not had the best advice. (For those who foolishly believe that the Archers is not a documentary but a drama, the "actress" playing Peggy, June Spencer, continues to thrivepast her 100th birthday.)

One of the most important recent developments in the popular farming serial is that Peggy intends to use £500,000 to establish a charity to encourage and support sustainable farming. So far, so good (although not all of her family agree, understandably). Particularly in the modern world, such a charity might well fit into charitable purposes of protecting the environment, or perhaps contributing to animal welfare.

But Peggy gathered her farming descendants together and suggested some kind of competition, where her family members could win by putting forward the best project - on their own farm. Now here there might be trouble - because if the trust funds are to be used by her own family, her charity will really struggle to meet the public benefit requirement. Even if the possibility of funding is opened to a wider audience, at least perceptions of a conflict of interest will loom. The younger Archers appear to have a head start.

So if the charitable funds get safely into charity, their use for any of the family is unlikely to be for a qualifying charitable purpose. Quite apart from trouble from the Charity Commission,Peggy's charity will lose its tax exemptions and her gift will suffer immediate inheritance tax. Her trust will suffer ongoing income and capital gains tax. Some careful structuring of charitable purposes and use of her funds might save the day - but only it seems at the cost of reducing the overall family benefits.

Even if she does succeed in her original intentions, she might be better advised to maximise her tax relief - and thus the benefits she wishes to achieve. So drip feeding her funds over a number of years might enable her to maximise her income tax relief - she is a wealthy woman, but I doubt she has an annual income of more than half a million pounds. And if she has other funds that might make their way to the family after her death, preserving enough to make a charitable gift of more than 10% of her estate on her death could allow the inheritance tax rate on funds passing to her family to drop to 36%. Of course, Peggy may have unused transferable nil rate bands from previous husbands Dan and Jack, so her inheritance tax planning may be well in hand - but what we know of her charitable plans does not give one much confidence. More generally, the Archer family's tax planning has always given me some cause for concern - an Ambridge branch office looks like an excellent business opportunity.


Alan Barr