Do you need your parent/s to die before April 2026? *MNHQ adding content warning mentions suicide*

[Spatulation]

Absolutely reeling that we're losing the farm that my grandfather bought, my father expanded and my son hoped to takeover.

The budget today means that we'll owe £1000000 in tax and we won't be able to get a mortgage as that's 5 times our annual income and over 35000 times bigger than last year's profit.

We own soil. That's it.

Agriculture has the highest suicide rate in any profession - sadly I can see it hitting an all time high in the next 18 months. My father (83) is already talking about it.

So true. People want cheap food but will pay silly money for other sh*t and tout their environmental credentials by buying organic shower gel and complaining about plastic. But they balk at doing the one thing that would really help and make a differnce to the environment,namely, paying more for food.

May as well get used to it though because the days of cheap food are well and truly over.

You will find no sympathy here. My dad has worked from the moment he could on his farm, 365 days a year. No holidays for us growing up and no days out as who will milk the cows. Now even at 75 and retired there is still many things to do. Now the farm we’ve had in our family for generations will need to be sold. Most farmers round here are already up to the eyeballs in debt. Machinery is so expensive and on finance. It is a way of life which people do not understand it is not money making in the slightest.

The OP has an issue because DF is still
the farm owner at the age of 83. Clearly could have passed the business on, but did not need too. Farmers do retire! However many still stay on the land and stay as a sleeping partner. They could be passing the farm on earlier and moving out but that costs a lot of money, so they stay put. Many farms don’t have property outside the farm. It’s a big blow when you have not planned for this.

Yes. So how is a thread title which appears to wish said farmer dead, helpful?

Assuming he lives on the farm then the dad would have to leave or pay the OP market rent.

7 year rule only applies if the person making the gift does not continue to benefit from the asset, if they do then its a "gift with reservation of benefit" and the 7 year rule does not apply, it is counted for IHT regardless of the passage of time, even if that is decades.

coupled with the fact that Labour gave an explicit pre-election assurance that they would not do this. Not that that was worth tuppance of course

Last time Labour tried this policy of taxation to cover their huge spending.

Those that faced higher taxation packed a suitcase and got on a plane and left

The ones who couldn’t get out or didn’t want to leave were left behind to face the tax bills.

My first job under an labour government, I paid 33% tax
I came out with £80 per month.

Thanks for that. I wasnt aware. So its even worse then..

It might have a value of that but it doesn’t mean they have that much cash. To get the value they would need to sell the farm and lose their livelihood

Scary how many people can't see that having things worth a certain amount is totally different from having the cash. The issue is that farmers mostly ARE rich in GOODS. But we aren't in biblical times. You can't pay the government your best cow, or pig or field. Most farmers are "rich" in ITEMS, but those items aren't things you can just sell for money. People don't want a field in the middle of someone else's land, or a random flock or herd...! The farmers can't turn a few of their assets into money at a whim. So when the next generation inherit those items they become rich in ITEMS, but if they have to pay MONEY they have to turn those items into money by selling the farm. They may then have money left over, but money on it's own doesn't give a livelihood, or produce food for us all.

But no farm. As a country try we need farms and the farm is their livelihood

Farmland hasn’t been subject to inheritance tax before for all the reasons already mentioned in this thread. It is impossible to plan for all the bad decisions that governments might make.

Yes. Spite at all costs.

The general election was an intelligence test that Britain resolutely failed.

OP, I'm guessing you are in your late fifties and have spent your life working on your family farm? I can understand why this has been a grenade.

HOWEVER, I think that this is an unintended consequence of the budget, and can easily be resolved with an exemption for farming families. For example, farms have a lifetime interest for children or relatives by marriage and IHT or CGT is only paid on death of the final person in the trust.

There are lots of ways around it for the government to consider, and I'm sure that will be put in place.

no its about needing to sell the farm to pay the inheritance tax, so not being able to take over the business/continue it. Effectively lose everything her ancestors have built up

@Spatulation Labour have really made a big mistake here. Can you take advice and see if there is any way to mitigate this. Is your mother still alive / younger? Appreciate the 7 year rule might not work for you given your father's age, I think (hope) that farming families in general will be able to pass assets earlier, although this doesn't allow for unforeseen circumstances, but they should have given it a much longer lead in time than 18 months :(

So many idiotic posters focused on the 'value' of your farm, when I am quite sure you all live a very modest and sometimes precarious existence.

And remember, the Inheritance Tax bill has to be paid before you can sell the inherited property. So the OP's family would need to raise £1m first.

This is the first thing I thought of the budget - they have chosen to hit farmers. Talk about biting the hand that feeds! Also we lost some wonderful huge estates and houses from about 1914 due to massive estate duties (and left wing politics) - some went to the National Trust but I thought we know had learnt from that that huge taxes on lots of land were not a good idea. There are lots of issues with farms when people do not go to a solicitor early on and sort out entitlement on death by the way. I read them all the time. I read this one last week https://www.falcon-chambers.com/images/uploads/articles/Cobden_v_Cobden__2024__EWHC_1581_(Ch).pdf

So with the current news it sounds like the best advice is give the farm away to the next generation or even the grandchidlren and move off it and retire completely (so no "reservation of benefit") once you know you only have 7 years to go. For many farmers that might make a handover at age 65 years wise.

I don’t know how farmland/ agr. productive assets are valued but it seems that for this new policy to be even slightly fair the value can only be assessed as value as agricultural land ( ie based on current use) - on that basis, and on an annual profit of roughly 30k ( per the OP) the farm is worth nothing like 6 million- more like 300k. The issue is if the valuation takes into account alternative uses such as sale of land for development which I assume it must do to get to 6 million, unless the farmhouse is some mansion.

There has been discussion around the farm being worth £6m, are you saying it won’t sell for that amount? If so, how much lower are you suggesting? Are we talking potential sale values of - 50%, 10%, 1% etc?

There’s many reasons why land doesn’t sell, it could be as simple as the price being too high. Could it be that the farms you reference, the land was overvalued perhaps?

surely in terms of this tax, the government would need a non-disputable way to value the land for tax purposes. seems extreme to charge someone £1m if the land is nowhere near that value. Don’t get me wrong, I don’t think farms are super desirable areas to buy but I doubt there would be zero interest or zero basis to the tax figure.

I'm so sorry OP. We need people like your family with the knowledge, experience and love of the land. Many ignorant replies here, what will happen when all the family-owned smaller farms are sold off? It's so short sighted.

Oh, just sell the farm, is it? Just sell a bit of the farm and pay your dues, you millionaire?

Asset-rich does not necessarily mean wealthy.

My relative has been trying to sell her organic farm since before Covid. She wants to retire and her dc don't want to farm. It's a successful going concern, but the food production and land stewardship side makes only a very small profit. She wouldn't even be able to pay her workers NMW, let alone LW, were it not for the wedding venue and B&B she runs on the farm. Plenty of offers for the weddings and B&B business, but none for the farm.

If my relative does not manage to sell before she dies, how will her executors just sell the land to pay Inheritance Tax if nobody wants the land?

This Budget means that my relative will now just sell to anyone who will take the problem off her children's shoulders, instead of trying to sell to someone who will continue to provide high-quality low-mileage food, environmentally sound land stewardship, local employment and tourism.

I'm probably talking out of my arse here, but I saw something the other day about putting properties into trust to avoid inheritance tax.

Is that something you could explore?

I have absolutely no experience or knowledge, but it did intrigue me.

I can recommend an excellent agricultural estate planner if you want to pm me (not me, just someone that I know through other work I have done with farms/farmers).

In terms of business ownership someone in their 80s should have measures in place already to mitigate any issues with the passing on of business to future generations, and most farmers I know review their positions at least annually from a much younger age.

I don’t understand what this government thought they were doing by jeopardising our food security .

I don’t understand why they’ve hit the most vulnerable pensioners or the poorest on the buses .

All I can think is that they don’t have enough real world experience outside politics

You have my sympathy OP