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

A married couple owning a farm together can split it in two, meaning it qualifies for £2m of agricultural property relief
Around here that would be a farm of about 200 acres. Just about viable as a family enterprise.
This is gong to fuck over the cereal-growing areas of the country.

Unfortunately most politicians have almost no understanding of the countryside, and the current lot in power have just demonstrated this in spades.

A bit like when Corbyn placed a vegan in charge of Defra in his shadow cabinet. Not a very well rounded decision to get the farming community on board.

Looking forward to the farmers in Westminster on the 19th.

Load up that slurry boys.

I could tell from your OP that you were a city person. This is my country being obliterated by a bunch of urban left-wing idiots. Didnt you learn anything about food security from WW2?
I can't describe how angry I am at the budget.

I do wonder if Ms Reeves point is to encourage make family farms sell acres of farmland - which will be snapped up for solar farms or carbon offset by the green energy companies she is promoting. Meanwhile it's raining and not enough wind/the wrong sort of wind/we can't afford Chinese prices for Lithium for batteries to store enough energy, so we have to import winter energy particularly at vastly inflated prices.
And the land taken out of active farming means we are producing even less of our own food, and as a result have to import it at a greater cost to the consumer & greater carbon cost overall.

I can see that the only outcome will be increased food and energy price inflation, and a complete lack of self sufficiency for energy for the UK, leaving us very vulnerable .

Has anyone in this government actually thought about the long term in this? Or is it just a quick cash grab for a few years from the unluckiest farming families, till Labour lose the vote?

It's very odd how Labour seem to hate industry. Farms, manufacturing. They didn't give a shit about the miners back in the day. They don't seem to understand hard work in any shape or form. Just people doing nothing on benefits

Do you have any idea how low average farm income is in this country?? £200k over 10 Years is £20k a year.
most farms simply don’t generate that much profit ! It will wipe them out and force those inheriting to sell

Not always. Life insurance is impossible if you have suffered with cancer. Can’t hand the farm on due to the 7 year rule, best to die “with your boots on” to pass the farm on.
Not now though.

I see your 200 and raise you 262.

There were a total of 462 inherited farms valued above £1m in 2021-22, according to HM Revenue and Customs (HMRC):

"Instead, it may be the estates of some of the wealthiest people in Britain that are liable for inheritance tax".

Yet, in 2020-2021, out of the 462 farms,

345 valued between £1m and £2.5m
80 at £2.5m to £5m
37 above £5m.

So, how exactly do those figures equate to "some of the wealthiest people in Britain liable for inheritance tax"?

If you think that a farm based between 1-2.5 million means that those farmers are some of the wealthiest in Britain, you really do not understand how farming works. These aren't big wealthy landed gentry here.

This shows the recent breakdown of farm value at inheritance.

87% of farms are below the new IHT threshold.

In that year 2% (63 farms) worth an average of £8m got a £400m tax break.

This change is about the wealthiest farmers, not people struggling to find £20k a year to pay a tax bill.

But the first £2m is tax free. So the £500k tax bill would be &10k a year. Or covered if they are sensible by a life insurance policy.

Don't you think we ought to.protect farms? That maybe they should have special treatment, a bit like the NHS? As we rely on them for our food security?

No not always, can be risky if the landowner is elderly or in poor health. Tax to pay on their death on a sliding scale for each year after they have handed it over. They need to live for 7 years in order to pay no tax.

If they either live on or benefit from the farm after the transfer, even if 15 or 20 years before death, for IHT it would class as a "gift with reservation of benefit" which would still be counted, in full, for IHT (neither qualifying for 7 year rule or taper relief)

The only workarounds would be to leave the farm and no longer benefit or pay the new owner full market rent.

I could tell from your OP that you were a city person. This is my country being obliterated by a bunch of urban left-wing idiots.

it is no more your country than mine. This thread has a lot of xenophobic postings

Yes this post explains it better than mine 🙂

In our case the landowner doesn’t want to leave the farm, he is still farming alongside his son (my husband). Both men were born and raised here. It’s all both of them have ever known.

As the son of a farmer (who didn't go into farming, my cousin is the next generation on the land) I feel his pain, and his love of the land.

Anyone who is interested this is a really good informative podcast out today going into things in more detail.

In short there will be workarounds for a lot of farms if they plan well and get some good competent agricultural financial advice.

Remember it's early days and things may still change.

S_

@YourAzureEagle that's not necessary true. There are ways round it which would make it possible for them to remain living on the farm - they could pay rent and have a property rental agreement. Downside is the rent would be taxable. They could be directly employed by the farm.
There are options but getting good advice specific for each circumstance is crucial.

Are life insurance policies available for 77 year old men with a heart condition and prostate cancer? He only takes around £15k drawings out of the farm every year, not sure where he's going to find another £10k from? At 77 he's still working 6 days a week from 7am until 6pm, more at lambing time.

His 43 year old son has basically worked 7 days a week doing 60-80 hour weeks for the last 27 years for £250 a week 'drawings' on the basis that the farm couldn't afford more and he would inherit everything when dad dies in return. In 10 years he's had around 4 weeks away from the farm taken as a few days here and there.

Until this week that was the best way to hand the farm over, how were they supposed to plan differently? There isn't a single piece of land they could sell that wouldn't immediately impact on the farm's ability to make a small amount of profit annually.

It's not my family situation but it is the husband and father in law of a good friend whose local authority job as a care worker is what actually puts food on the table for her and her farmer husband and their children. This year like many farming families their income was low enough that they were awarded a grant from a farming charity to pay the school uniform costs for their children to attend the local primary and secondary.

I'm laughing hollowly at all the sudden agricultural finance experts on mumsnet.

@Scrowy give them the link to the podcast I linked in previous comment. There's some ideas on there
But absolutely nothing will be more beneficial than getting some proper advice from an agricultural accountant. A few hours and hundred pounds worth of proper advise could save them a fortune (and potentially the farm). There isn't a straightforward answer to what they should do. They need proper advise

To be fair the ag accountants are the ones who are going to be making a pile of money out of this!

If only 80 families will be affected by this each year, then why destroy our farming industry and our food security for a sum which is utterly devastating and destructive for those families, but must be insignificant to the UK's overall economy (if it comes from 80 families a year ffs. Out of 70 million people).

It makes zero sense.

It wouldn't be fair or reasonable for a government to deliberately destroy 80 families a year for a pittance of tax even if those families weren't fundamental to our future. Destroying our farming families is self-sabotage on a mind-blowing level.