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.

Very sorry OP. It's a terrible new rule. No farms no food. I'll be labelled a conspiracy theorist for this but I think it's on purpose and for that reason it will not be repealed. Strong nations are being deliberately weakened in all manner of ways: independent food production, energy, national identity. I understand independent farmers in the Netherlands are under attack via nitrogen limits. It's wicked.

I agree with you. Money isn’t the answer. There is so much wrong with it on so many levels.

In a situation with major structural problems facing the country that requires a broader tax base or accepting continued deterioration of public services, then yes, it’s ok if someone inheriting a £6million estate to pay an appropriate level of tax on that inheritance.

The major structural issues will not be resolved until the government controls immigration and the number accessing the system/housing/healthcare. We can increase taxes to 99.9% and the overall standards will still plummet if over million a year continue to arrive.

What is the plan for this?
There isn’t one.

It may leave them wealthy but it will leave our supermarket shelves bare. You won't be so smug when you are paying £s for a few carrots.

The owner of the most farmland in the USA is BILL GATES. Not a conspiracy theory that's fact.
I'm firmly in favour of as much self-sufficiency in food production at a national level as we can manage.

Labour will never handle immigration.
Millions more will arrive via the people smugglers without documents and need to be housed and fed, sent to school, have dental and medical care.
It places a strain on already creaking resources, Councils are already tens of millions in debt.

If one lives in a wealthy rural area, it's not so noticeable.

i don’t care if I’m being labelled a conspiracy theorist with you on this. I don’t doubt that they are doing this on purpose in the name of billion pound black hole, fairness, net zero, whatever…basically BS. They want to make everyone poorer, and be at the mercy of and dependent on the State, over time of course to make it not obvious, but it’s not difficult to see their actions (regardless of what they say) and join the dots.

They want you to own nothing and be happier by 2030, remember that.

It's odd every few days there are fatalities in the channel, it seems people just don't mind this anymore or doing anything about smugglers

It's like everyone has just given up even trying to stop the illegal smuggling of people.

Afghan women, those who REALLY need asylum aren't the ones coming.
It's just endless reams of young men.

And Mr Gates was seen at number 10 not so long ago, but must be coincidence.

I listened to a brilliant piece the other day on people from Vietnam, someone who went incognito to say how and why they did it. There are VIP services where you can pay more to get across. He did lie to get asylum. I don't blame people in a way for trying but it seems everyone is just say fine whatever, deaths in the channel no problem.

I would take in more women and girls from Sudan, what's happening there is horrifying.

Please get some proper advice from someone who knows what they’re talking about. Without numbers there’s no way of knowing but; it might not be as bad as you think - there is some wild reporting on this that is totally inaccurate.

1. There is a £1m nil band, in addition to his normal nil band of £325k. So that’s £1.325m that can pass down tax free.
2. If he’s married then he can transfer some of the farm to his spouse. That doubles the nil band, so that’s £2.65m that can pass down tax free.
3. The rest (over and above the £2.65m) is chargeable to IHT at 20%, but you can pay over 10 years, which is a bit more manageable.
4. Insurance might be an option to cover the IHT bill.
5. He can gift the farm to the next generation now. If he survives another 7 years then the gift is exempt from IHT. If he survives more than 3 years then the transfer is chargeable but there is a reduction of 20% (40% after 4 years, 60% after 5 years and 80% after 6 years).

Please please please speak to a qualified tax adviser, and not one of the ones who are shrieking hyperbole all over social media. You need a cool head here. I know this is worrying, but it might not be as bad as you think, only a small number of the very largest farms are expected to be impacted in reality.

That poster isn't being in the least bit smug. She's one of the few avoiding using this scenario to further their political agenda and actually thinking of the human beings at the heart of it. What use is twittering about the price of carrots to a family where the father thinks he needs to kill himself? The man is suicidal because he thinks his family won't be ok, not because the price of veg will go up. The OP needs to reassure him that despite this they will manage, so he has some peace of mind.

Paul Johnson is an economist who, as far as I can gather, has no farming experience or specialist agricultural business/tax knowledge.

He's quoting RR's belief that there are farms of 100 acres or less are viable self-supporting businesses.

The farming world are still trying to ascertain what research was done to support RR's claim that 3/4 of farmers won't be affected, were agricultural specialist consultants used, if so who and what basis did they use for their findings ?

HMRC information on APR claims in 2021-2022 show that out of 1,730 claims for APR, only 462 were for over £1m. With a £1m nil band that means that only around 27% of farms in 2021-2022 would have paid any IHT at all (and probably fewer with proper planning). This is disputed due to the interaction with BPR but when you add in spousal transfers and the normal £325k nil band per individual, on top of the £1m APR nil band (x 2 if a married couple own the farm), its expected that most farms will still pay nil or small amounts of IHT.

The information is in the statistical annex, here: www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms/summary-of-reforms-to-agricultural-property-relief-and-business-property-relief

Unless of course it’s money that they haven’t earned but has been made on their house.

Then god forbid we tax that either on sale or death. Honestly I’d put CGT on primary residence and be done with it.

OP I’m so sorry that your dad is feeling this way. People have no idea of how critical farming is to our future.

So, someone who does understand agri-business and does understand tax did some number crunching. Only around 37 farms a year will now be subject to inheritance tax as a result of the changes, based on the numbers who have historically claimed the exemption over and above the threshold.

People should bear in mind that this £1m is in addition to the general threshold of £325k and also that there is no inheritance tax between spouses and that the spouse to die last can use the other's allowance. So married farmers can still pass on £2.65m before they pay any inheritance tax at all.

The OP's farm would need to be worth £7.65m to pay £1m in inheritance tax of 20% (assuming none of the farm is passed on before that in a tax efficient way). As you can well imagine, not many farms are worth this much and in fact of the 37 estates captured, most were unsurprisingly not working farms but rather large portfolios of agricultural land with tenant farmers.

I know some people will try and pull on the heart strings with these kinds of scenarios but honestly most of us aren't going to be inheriting millions of pounds. To give it full context, if the estates of 37 millionaire farmers a year didn't pay inheritance tax, millions of people with nothing to inherit would have to pay a lot more tax. That doesn't seem very fair to me.

And no, farming is not going to be all that affected as a result either. That's just Tory Party propaganda and handwringing from a few very well off people like the OP who resent paying their fair share of tax.

The problem with that argument is that virtually every study tells us that immigrants contribute more to the economy than they take out.

Immigration makes the country richer, not poorer.

The answer here is not reduced immigration but harnessing their economic contributions to better effect to support public services. But fundamentally claiming that less immigration would obviate the need to raise more tax revenue is incorrect - it’s actually the opposite is the case.

The problem with that argument is that virtually every study tells us that immigrants contribute more to the economy than they take out.
Immigration makes the country richer, not poorer.

I'd honestly highly doubt that is true of illegal immigration/asylum. Legal, highly qualified immigrants, absolutely. Or, prior to Brexit, younger healthy immigrants who worked for a few years then went back, so plenty of taxes paid without the costs at either end.

Was it the case that inheritance tax was only removed from farms in 1992 anyway?

Yes, and also what they have seen in parts of the United States is that there is a correlation between net emigration and higher unemployment because immigrants don't just supply labour, they create demand for it too.

Huh? But they'll be fine? They can sell the farm and inherit millions of pounds, why would he think his family won't be fine?

Even an illegal immigrant normally contributes. Anyone who is in a country and works does. Even if an illegal immigrant is paid cash in hand they will still spend it. Thus they still create demand for goods and services and therefore contribute to the creation of other jobs.

Statistics from the Obama era in the USA showed that for every 500,000 undocumented migrants forced out of the country, there were 44,000 less US born people in work.

The average price of arable land in England rose by 4% between 2022 and 2023, with an average price paid of £11,300/acre. Over 70% of the arable land traded in England during 2023 made more than £10,000/acre. As is usual, there was a much greater variability in pasture prices, because grassland can differ so much in terms of quality, with prices ranging from a low of £4,000/acre to a high of £16,100/acre, with an average of £8,700/acre.

A 4% rise in land value in a year?

If that is an annual pattern then arable farmland worth £1m now, which people seem to be saying would be free of IHT if all reliefs are used separately for the farmhouse etc (agricultural + general £325k + £175k nil-rates) will in six years, by 2030, be valued at £1.27m This would attract an IHT bill of £54,000.

Unless this new budget causes land prices to fall, or at the very least to increase in value at a much slower rate, then for all of the talk about ‘farms under £2m being IHT-free’, that only applies to their value at the time of inheriting, not what they are worth now.

At a 4% annual increase, farmland valued at £1m in 2030 would today be worth £800,000 or, at the quoted £11,300 per acre, cover about 70 acres.

70 acres.

That isn’t very much for a viable farming business.