2024 UK politics - now with Labour in charge
Comments
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Putting aside whether non-farmers might want to not break up their estate or if selling a field to fund 20% of the residual value above the threshold counts as 'breaking up' a farm, If they want to gift a farm to their child or children, why not do that and buy life insurance for the seven year period thereafter?
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
As I understand it the vast majority of farmers will be able to structure their business and finances so that this is a non-issue. Non-farmers that thought they had a loophole? Boo hoo.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Largely, yes, though I think there might have been an underestimation of what an 'average commercially profitable family farm' is worth, and other details that might need some adjustment to make it equitable but still fulfilling the purpose it's intended for (revenue-raising, and closing a loophole that has made farmland grossly overvalued.)
There might also be some details needing fleshing out about how much time is allowed for restructuring the passing on of family farms... I imagine that there are some elderly farmers who haven't got a likely seven years life left to make the necessary changes, in comparison with, say, someone in their 50s or 60s who can plan with the new regime in mind.
I would hope that genuine farmers would be able to see the logic and the upsides of the change to take the heat out of the market, even if the likes of 36k-acres-Dyson and the Telegraph are trying to get all farmers to be upset.
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"There might also be some details needing fleshing out about how much time is allowed for restructuring the passing on of family farms... I imagine that there are some elderly farmers who haven't got a likely seven years life left to make the necessary changes, in comparison with, say, someone in their 50s or 60s who can plan with the new regime in mind."
That's just a general lack of foresight though. People should have this in place long before their expected final seven years. We had all ours in place while we were in our 50s. The transfer of a business should be completed while the recipients are in their prime, not while contemplating retirement themselves.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Yes I think there may be a compromise along those lines that should be looked at.
[Castle Donington Ladies FC - going up in '22]0 -
Should financial planning really have to rely on giving up your farm 7 years before death which is obviously guesswork anyway. People do die young what then?
We get that most people can get around the new rules that way but it seems unsatisfactory to have to "get round" rules and say bad luck if a farmer dies unexpectedly or if they aren't the type to engage with financial planners.
I do think there is a case for inheritance tax on some farm land and maybe even very profitable farms which are farmer owned but I wouldn't write off the concerns of all farmers on thism
[Castle Donington Ladies FC - going up in '22]0 -
"Should financial planning really have to rely on giving up your farm 7 years before death which is obviously guesswork anyway. People do die young what then?"
Because that's how it works for everyone else. Why should farmers be a special case? Everyone or no-one.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.1 -
What could possibly go wrong, if Trump removes all regulatory checks on domestic US foods & goods, and then the 'deal' is that the UK has to accept those foods & goods?
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It's not in the state's interest to have businesses or farms broken up and sold off to pay IHT bills, as it will likely reduce the tax take from them the longer term. For info, business relief from IHT was introduced by Labour in 1976 for that reason. It also encourages investment in businesses. The rules on IHT relief for farms followed in 1984.
And re: farms, there are matters such as security of food supply to consider.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
So, will farms treated different (as in worse) than any other business?
The security of food supply flight took off quite a while ago.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
There's these crazy things called imports. We've relied on them since roughly the middle of the 19th century.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
It was a reply to a post that suggested owner farms won't be broken up because inheritance could be avoided using that strategy.
As for why farms should be a special case - you may not think they should be but my comment came out of the discussion on this forum as to why. Basically because some farms don't produce a great deal of income so the farm will have to be broken up to pay the inheritance tax .
[Castle Donington Ladies FC - going up in '22]1 -
We have, but why mess up our domestic food production industry?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
As I read it, farms have been and will be treated the same as other businesses. But the point remains - why cause many of them to be broken up for something that raises relatively very little revenue in the short term and likely reduces it in the longer term?
See my comment above to RJS re: domestic food production.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
See my point about the advantages of taking the heat out of the farmland market to make it more accessible to new entrants. It's as clear as day that the ludicrous prices are being driven by its IHT advantages. It's not good for the industry as a whole that land value has been so hijacked by those seeking to avoid tax.
There are arguments about the details of the change (threshold etc.), but a downward adjustment of land values would seem to be good for the industry as a whole, as it reduces costs.
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I'd be intrigued how many farmers own the land they farm. My sample size is not very big.
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My sample size might be slightly bigger, and most of them have been small-scale owners, biggest about 250 acres.
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Actually, not sure that my question can really be answered because I would not include those that sub-contract the farming to a farm manager as people who actually farm, but I imagine any statistics would do.
Dyson is the 25th largest land owner in the UK.
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A few farms selling off one or two fields each is not going to collapse UK food production. Just as IHT doesn't stop non-agricultural family businesses. Or even ones where your children aren't stupid enough to follow your career choice.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
That’s a “no” then.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
A quick Google suggests East Devon farmland is £15-20k/acre so 250 acres is somewhere around £4-5m. Assuming someone wants to pass such a farm on without any tax planning (which would be odd for a £5m inheritance) then they are paying 20% of £2m in instalments over 10 years interest free. So £40k per year. If that's entirely funded by selling land, that's 20 acres, which is about 2 fields, I think.
As a separate point, land that is sold (to other farmers) is still farmland. It's not taken out of production, so we can stop worrying about food production. Land use changes year on year anyway to maintain fertility.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
See my point above about damaging future revenues. Depending on the financial position of individual farms the amount they need to sell off will vary, but there will be a tendency to lose economies of scale at least.
And as your last sentence implies, its not the most lucrative career so the impact of finding 20% of the total value could be pretty significant. Certainly the farming community seems to think that it's a big issue.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Definitely interesting to see an argument put forward that we can rely on food imports when it's necessary to offset the potential downsides of a Labour policy, but the risk to food imports from Brexit - a Tory policy - were according to some a one-way ticket to living on turnips in the UK.
Reliance on food imports is surely a good thing or a bad thing, rather than a pro-Labour or pro-Tory thing.
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You asked if farms were treated the same as other businesses with regard to IHT - I said above that they are.
What are your thoughts in the impact of having to sell off large parts of farms to fund the IHT bill?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Agreed, if they want to target those going in for IHT avoidance by buying farm land etc then there are better ways to do it that this pretty cack-handed effort.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
What are they?
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Well obviously they are whining about a tax that they used to get a pass on, but now don't (to the same extent).
In any case, I'm sure I remember you posting that IHT was pretty straightforward to plan for and only the ill-prepared should find it a real burden.
And maybe some small family farms are no longer economic, just like we don't all get our clothes made by cottage industries or have our cars and bikes built by the local blacksmith. It's no longer the Middle Ages FFS. Stop being so bloody sentimental.
I can't believe you of all people are actually arguing for under-performing businesses to receive (even more) government subsidy.
Oh, silly me, it's got a red rosette on it 😛
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I guess technically the poor people like Dyson lose twice. Once by potentially paying IHT, but twice in its impact on land values. Still, much like the tax free element of pensions, people really need to understand the risk of anything that is tax free.
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Exactly. I asked if they were going to be treated differently. The answer was, no.
My thoughts on the impact. None on food supply, a bit hit for those using it for tax avoidance.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
I see you have become an expert on farm finances over the weekend. Well done.
I curious how you know what farms are economic and what aren't, or which are under-performing and which aren't.
But you don't know, do you.
You just decided to have a rant about the middle ages, and blacksmiths making things.
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