To ask why you support the farmers, regarding inheritance tax?

Thank you that does help! A lot of people seem to think that because labour said they won’t be affected they won’t be affected when they absolutely will be affected… guess what, labour lie just as bad as the last government.

Good idea to repost @magicmee it was a good and informative post that helps counter some of the incorrect stuff in other posts

This was posted on another thread by @notanothernnamechange24 and not my words, but I thought it was a concise, very well worded explanation

"Decided to write a post to kind of myth bust a lot of what is being said around the agricultural Inheritance Tax issue. Because this issue is important to EVERYONE and will affect all of us.
It’s going to be a long post but please read it in full.

What has changed?
So with the budget the government has removed both APR relief and BPR relief from all businesses.
APR = Agricultural Property Relief - this covers the land, the buildings and the farmhouse.
BPR = Business Property Relief - this covers the machinery, equipment, livestock, consumables such as seed and fertiliser and crop in the ground.
Now the first million of combined assets from both APR and BPR is IHT free and anything over 1 million is taxed at 20%.
Under certain conditions it MIGHT be possible for SOME farms to get up to 3 million tax free. But that doesn't work for all. It’s a case of if your circumstances meet the exact criteria your ok if not you won’t get the full 3 million.

When the government talk about 500 farms per year being affected they are only talking about the APR proportion of the tax. They have deliberately excluded talking about the fact that BPR is also included and taxed.

The NFU are saying that 75% of family farms will be affected.

• it will also include a significant number of tenant farmers as they still will be affected by BPR.
BPR will also affect a number of other industries as well.
Haulage firms, Contractors and any businesses with high asset values comparative to income will be badly affected.

At the same time subsidies are being cut by 70% in some cases
Tax on fertiliser is going up by £50 per ton.
Tax on domestic vehicles is going up over 200%
NI for employers is going up.

Why shouldn't farmers pay tax like every other business?
Because quite simply farming doesn't work like any other business does. Most businesses work out their pricing by working out the cost of production + profit and tax. They are in control of who they sell to. When component prices go up so to does the selling price.
Farming doesn't work like that. Farmers have little to no control over prices.
The combination of global markets, supermarket competition and subsidized food control the prices.
At the same time input costs and yields are not controllable either. Weather conditions play a huge role in how good the harvest is. Unless you are able to grow all your feed for your livestock there can be huge variation year to year on feed prices.

Farming is a high asset value to low income business. It is unique purely because it is a rubbish business model. But it is a necessary business. Without it quite simply we would have no food.

Why do farms make so little return?

A lot of the foods you buy are subsidised by the government and has been for decades.
if we had to pay the full costs we would have an even more serious poverty issue than we have already.

After the war in the 1950s we had a serious issue with malnutrition and issues like rickets. Food was short and expensive. The country on its knees after the horrors of the 1940s. In order to combat that the government subsidised lots of essential foods. So the public were paying artificially low prices for things like milk. They then paid the farmers a subsidy to partially make up the shortfall

For context in the 1980s people were paying approximately 25% of their household income on average on food.
Today it is approximately 13% so half.

A pint of milk was equal to two pints of beer
Now beer per pint is 13 x more expensive than a pint of milk.

If people want farmers to go back to paying IHT then they will need to double what they pay for food.

Can you afford that? Can everyone you know afford it?

It’s important to note too that even with subsidies farmers still do not get the full value of what they produce.

What about people buying land to avoid paying tax?
The likes of Clarkson and Dyson buying land is a red herring. That land is still in the business production of food. It's doing what's needed.

Many many big landowners rent agricultural land out at very reasonable rates for tenant farmers. They do so because they don't need the money for the rent (it needs to cover its cost not much more) because the payoff comes in the form of reduced IHT.

I personally know a farmer who rented land for 17 years from a landowner. Then when landowner was considering selling up he sold it to the farmer at a really good price and guaranteed the farmers mortgage!

That said though this budget will do nothing to deter those who seek to reduce their IHT bill as it will still be the cheapest way of reducing IHT bill.

But farmers voted for Brexit
farmers voted for brexit in no greater numbers percentage wise than any other profession.
Don't make sweeping judgments without actually knowing the FACTS.

Farmers are no more responsible for brexit than any other profession

What about Gifting the farm?

The trouble is you don't know when you're going to die.
If you gift it on then you can't benefit from the farm in anyway after that. So you can't pass it on and remain living in the farmhouse for example. Even if the person you pass it on to is also living there.

And what if people don't die in the right order. Farming is considered to be the most dangerous profession in the UK now. What if the oldest generation pass it on and the younger generation die first?

Putting land in trusts is also complicated. For large landowners that is probably what they will do. So therefore the very wealthy will still avoid IHT.

But for the majority of farms putting it in a trust doesn’t work because once it’s in a trust you can’t borrow against it. So you can’t raise a loan or mortgage against it. This will slow or halt development and progression.

What are the potential consequences of this?
If we lose too many family farms due to this tax then they are likely gone forever. Other farmers won’t be able to buy up all the available land - they simply don’t have the money especially now.

If food production here reduces we become even more vulnerable to the instability of global markets.
At best it would mean price hikes at worst if there were to be another major war or global disaster we could have serious food shortages. You only have to think back to the panic in 2020 with covid to see the potential for chaos.

I hope notanothernamechange24 doesn't mind me posting her post.

It's been done to death, and although I'm all in favour of understanding people's views, it doesn't seem to be helping to get to the facts.

Lots of emotions, lots of anger, not much factual presentation of evidence. Like so many recent news stories: small boats, Brexit, facemasks, winter fuel allowance. Very shouty world these days.

The vast majority of farms will not be hit with inheritance tax. If any farmers believe they are at risk of falling into that category, they can create trusts to pass farms on to their children. Many already do this. Even Clarkson, when he admitted that he bought his farm partly for tax avoidance, pointed out that farmers can easily use trusts to avoid the new inheritance tax.

"But they shouldn't have to" said Jeremy. "But they easily can" says me. Hardly worth driving your tractor to London for. When you make your will, talk to your solicitor about putting the farm in trust. (Like you probably already do).

So I really don't know what the massive protest was about: either the farmers are furious about something else, or they've been manipulated into believing this IHT is some huge threat.

It's obvious to me that the government is trying to prevent the super-rich from exploiting a tax loophole, buying farm land to avoid tax. (Looking at you, Clarkson).

A discounted inheritance tax (20% instead of 40%) which only applies on the excess amount, with ten years to repay the tax, free of interest.

And legal means to pass on farms to the next generation tax free.

I do not understand what the anger is about

Yup

I support them. Even large farms, say 1000 acres, struggle to make a living of any kind. So quite often a child who is becoming the farmer is essentially sacrificing a career somewhere else by investing sometimes decades in the Farm. I just think when you look at the long-term impact on rural communities and what will happen with the land it’s only bad. It will simply encourage increased commercial purchase of agricultural land and mega farms.

@Toastandbutterand

It's a minority of farms above this price. All the statistics say it.

It's not a minority of farms though. I'm not sure what statistics you're talking about as the government refuse to publish their data they have based this all off. Somethings not right where two government departments have vastly different figures.

There is an amazing post by a lady on another thread explaining quite a lot I didn't understand, I will see if I can link it.

The statistics being quoted by the government are not correct. That’s the whole problem and why the farmers are protesting.

I support the farmers on this as I am from a farming area although not any in my family.
Farming is extremely gruelling 7 days a week work. The money is in the land but for this reason is not accessible. Margins are so small and so many things can and do go wrong, droughts, floods, infestations, diseases and machinery breakdown. Vetinary bills can be huge and there is an enormous issue with criminal gangs stealing farm equipment or valuable animals.
I can’t believe the comments around buy a new landrover every other year. Go work a year on an actual farm and you won’t have the spare breath to make such ridiculous comments. My siblings best friend worked on a dairy farm, nights out curtailed as up at 5, never could go on a boys holiday. I despair of the lack of knowledge some people have.
Also, where are all those environmentalists when we think about food miles?
We need a Government who does not turn sections of society against each other for what will be no real gain to anyone and a lot to loose.

I support the farmers. We need food security in this country and it is being eroded by this and other measures.

Passing on a £3 million farm isn't the same as getting £3 million in cash. The money is locked in the land and mostly isn't accessed. Don't add IHT but instead add a land sales tax. That way the land can be passed down for farming safely but any financial gain for an individual is taxed at point of sale. Good for the farmer and good for the treasury.

To be honest it's probably about time these guys paid inheritance tax like the rest of us.

Exactly! It’s very easy to get caught up in the furore but let’s remember the ruling class is driving this issue ie Clarkson and Farage…these people don’t protest in support of single mothers or the homeless! British public have zero critical thinking skills!

Interesting discussion on The Rest Is Politics on the farmers this week.

Rory makes a good argument for the small farmers plight.

Politicians on the right who pushed Brexit, which is now screwing farmers, are now trying to stand for the farmers, says Alastair

Rory hoping Labour retreats on this policy... Alastair arguing that the facts are getting lost here and the narrative is being taken over by celebrities and the press... he argues the government needs to engage in the debate and tweak the policy as necessary. He says we need an honest argument about who owns land in this country and huge rich non-doms need to contribute

Seems pretty complex.

So communism would work better?

The desire for a solution to food waste at supplier level and effective, timely, distribution of food by offering producers better, more flexible, and alternative market access which in turn creates wealth is not linked to communism.

Improving the access to alternative markets is far better than the near oligopsony we have with the supermarket system which drives down prices paid to producers to unsustainable levels, allows the artificial rising and control of prices to the end consumer, reduces the number of new entrants to the industry, and stifles innovation and investment. All of the latter force producers into the very situation we have right now.

The agriculture industry as it stands is almost incapable of creating wealth except where small, specialist markets are accessed by small specialist producers where by it is such a small market it barely creates wealth on its own with only a small smount of farmers able to access them. Improving this and more markets will help create more wealth.

But only for land owners. Everyone else pays tax?

I have never said anywhere that I am adverse to some landowners paying IHT in fact I have suggested some land owners do pay IHT

What is it you actually want?

A long, healthy, and happy life in the company of friends and family.

What is it that you want?

So communism would work better?

But only for land owners. Everyone else pays tax?

What is it you actually want?

Also, if there wasn't an exemption, then the rich wouldn't buy, so the price for genuine farmers would come down.

It's a minority of farms above this price. All the statistics say it.

The fact that land prices have gone up only makes someone rich if they sell

Does anyone know what happens at the point of sale of a farm? What taxes would there be then?

I support the farmers though I don’t come from the farming community.
My reasons?

1. Besides food production, farmers preserve the countryside.
2. Pay within agriculture is low and you can’t pay your bills with 2lb of arable earth
3. Given the Zero carbon Agenda, importing food would add a massive carbon footprint to our country.

What you say may be a good idea in principle but don’t see the point of the ‘get people like Dyson’ motive.

Dyson must have made millions for the country. He does not ‘owe’ more just because it is so annoying that he is successful and rich.

And no reason why there can’t be another

I didn't explain this well my apologies. The supermarkets aren't destroying the crop but because they don't buy it or all of it then it gets ploughed in or composted on farm. Sometimes there are promises to take a certain amount and sometimes they do not take it all. No one takes that produce and there is often no access to a market that will take it. The short shelf life of fresh food is part of the issue we need a better food system with proper alternatives to market that are flexible enough to cope with the needs of the industry to get crops into proper storage and out to the people who can use it or at the very least to people who need it. There are some places that do this but they are few and far between and as usual close to urban centres and regions of higher population.

You can categorically say what you like from your own experience, we all speak from our experience and I respect your opinion. I've worked from Somerset to Cambridgeshire, from Hampshire to Yorkshire and can catorgorically state loads of people I worked for are not well off by any means but they live on amazingly high priced land. It doesn't matter which of us is right because in truth neither of us has the edge on that, the fact remains some farmers do OK a few do really well and some struggle to varying degrees. This has little to nothing to do with land values, they are what they are due to a tax loophole that could have been foreseen and should have been closed way before the rot set in.

The sad fact is more people will be affected by this policy who are not Mr Dyson and Mr Clarkson than we realise. And the real shame of it is every single person living in the UK will be affected by the ramifications of this policy because of the sensitive nature of this industry. There is no getting away from that whatever we discuss, whatever our opinions are, I personally wish it was not so but here we are.

Then you’re a fool!

Absolutely agree, then when we are completely reliant on imports the prices will double or treble. We’ve learnt nothing from the fuel prices fiasco! Whoever thought being dependent on Russian gas was a good idea, maybe ought to think again as we may be at war with them next week!!!!

This sounds sensible