2024 UK politics - now with Labour in charge

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?

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.

Yes I think there may be a compromise along those lines that should be looked at.

"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.

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.

There's these crazy things called imports. We've relied on them since roughly the middle of the 19th century.

We have, but why mess up our domestic food production industry?

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.

My sample size might be slightly bigger, and most of them have been small-scale owners, biggest about 250 acres.

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.

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.

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.

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.

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 😛

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.