Farming - kerfuffle

[Solomotree]

interesting how Jeremy Clarkson, one of the biggest vocal opponents of the inheritance tax on farms, literally boasted that he bought the farm to avoid paying it. It’s people like this we need to clamp down on and where people’s ire should be directed. And the vast vast majority of farms will not be affected.

www.theguardian.com/uk-news/2024/nov/01/farmers-shocked-budget-inheritance-tax-estates

Is no-one else bothered by this man’s absolute bell-endery here?!

I agree, OP. The question of IHT on family farms is complex and I have some sympathy for the genuine farmers caught by the budget’s bombshell. However it seems farms were becoming used as a tax fiddle also and it is no surprise that Clarkson and his ilk would boast about this. I’ll be glad if he has to pay his share to support the country that has been good to him.

Yes, Clarkson as farmers’ saviour pisses me off. He is predominantly lining his own pockets! Is he actually promoting buying from your local farm? No, he is promoting driving across the country to queue at his farm, or ordering his goods off Amazon!

The amount of tax paid by family farms will be incredibly low. I was reading earlier that on a £3million estate inherited from married parents you'd expect to pay £200k over 10 years. As opposed to approx £800k all at once if that estate was not a farm. Not a bad deal at all imo.

And where does that money come from?

yyou need to be able to farm? The animals that you need to farm or the machinery that you need to farm with?

Most farmers are working for less than minimum wage as it is already if you add all the hours up over 7 days a week 365 days a year.

What do you sell first to pay the tax bill? The land that

Most have decades worth of debt to pay back from buying enough land over the generations to make it into a large enough farm to just make a profit.

Subsidies are pretty much gone.

Most farmers do not have the money available to pay inheritance tax bills and will be forced to sell their farms. Enjoy paying extra for imported food when all the farms are sold and we’re no longer producing our own food in this country! !

Apologies my phone messed up the post above - our poor rural internet can't cope with the massive ads

it should have said

And where does that money come from?

Most farmers are working for less than minimum wage as it is already if you add all the hours up over 7 days a week 365 days a year.

What do you sell first to pay the tax bill? The land that need to be able to farm? The animals that you need to farm or the machinery that you need to farm with?

Most have decades worth of debt to pay back from buying enough land over the generations to make it into a large enough farm to just make a profit.

Subsidies are pretty much gone.

Do you really think most farms just have a spare £20k lying around each year to repay a £200k IHT bill? (And that's on the lightest side of what we are talking here). Margins are wafer thin for working a +80 hour week 52 weeks of the year.

Yes but you aren't inheriting £3million in cash, or an empty house worth that. You are inheriting the business that provides your own and your family's livelihood and in all likelihood is not turning enough profit to pay off £200k + interest in 10 years. So you have to sell off a big chunk of it which means even less income in future.

Why bother changing the rules if it’s not going to raise much money. People’s lives are going to be blighted because of the politics of envy.

59% of farms are less than 150 acres (DEFRA data) ie small. These are the farmers who need our support.

People seem to think farmers have the cash available to them. They’re usually land rich, cash poor. And as @ExquisiteIyDesigned says, the more you sell, the less profitable land you have to farm. You either sell the farm as one big estate on the first tranche of inheritance tax, or watch the estate being eaten away over time until it can no longer function. They’re not residential property, they’re food producing businesses.

It's not just farmers that own their farms that will be affected either.

I'm a tenant farmer, our landlords own 4 other farms one of which they farm themselves. They've had all the farms in the family for many generations and let them out at a very reasonable rate on long tenancies,

Presumably when the current generation dies they will no longer be able to hand all four farms on to the next generation in the family to keep farming/letting out to tenants - at least one farm will probably have to be sold, or broken up into parts to pay the tax.

Sure, they can afford it, but it will be the end of an era for that family and the great way they have been operating to ensure that traditional farming can continue in the area.

Which poor tenant farmer will inevitably get the chop and lose their livelihood?

Wtf. Have you ever seen the profit on £3 million of farmland? That is about 300 acres, and won't be making enough for £20k in tax a year for ten years.

Please god someone help them

With the price of land for housebuilding development what it is round here at just over a quarter of a million an acre (I just had a look on local Rightmove), and a farm possibly being around 200 acres, that's £50million of anyone's money.

I'd be interested to know how many in that number are what we refer to as 'hobby farms' and are seriously skewing the data on how many farms are actually the primary source of income for the occupants rather than being funded by other income streams as a hobby or somewhere to hold money as an asset.

Rachel Johnson said that james Dyson did the same to he has bought land

But this used to be the case.
Surely you can plan ahead for all but a dreadful/ untimely demise?

Farmers are often awful at succession planning - this might actually help!

Life insurance taken out to cover the tax payment?

Any borrowing will be deducted. And 50% relief too.

I agree, it's probably more problematic for tenant farmers though.

I'm from a farming background myself, but the general public won't understand why all the hand wringing when people are driving round in a new truck and have a tractor worth as much as their house - even if both are not paid for.

FYI The 10 years to pay applies to all estates, not just farms - that bits not new, been part of the IHT system for a long time.

I agree, a small farm like that is for hobbyists, it's not sustainable.

We need a way to differentiate between the farmers who produce our food and the finance chappies who buy a farm to evade IHT.

Anyone with any building potential has that tied up already. Very very little land that has potential will not have been identified and capitalized already

I have a very small farm. I run a 100 ewe flock. Nevertheless we sell high quality breeding gimmers and our males go for meat. I’m not a hobbyist though. I take it all very seriously. We’re right next to a desirable market town. I could make a fortune if I got the right planning permission. But…

They Are catching totally the wrong people with this tax. They’re missing the hobby farmers with 100acres that was bought with city money for a few horses and a bit of fun. Also missing the Jeremy clarkson types who bought specifically to evade IHT.

what they will be catching is your 800 acre farmer in their 70’s or 80’s who had worked a 70 hour week all his life. Breaking up these farms will be a huge huge turmoil.

however there is a big argument to be had that the generation could have handed it down, survived 7 years and avoided IHT. Many farmers in their 50’s are puppets of their fathers and should have been given the land 10 years ago.