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

If we accept that protecting family farms is in the national interest for food security why don't we abolish inheritance tax on them but instead introduce a very high tax rate on them when land is sold? This would ensure the smaller farms are more sustainable but prevent big landowners from making cast sums on buying and selling land.

You have explained this perfectly. Farming is renowned for multiple generations working the land together. Sometimes 3 generations in one way or another. My mum (in her 20s) worked alongside her father (in his 50s) and his father (in his 80s). This was never was nor will ever be a solitary job. Traditionally neighbours and friends would rally together to help with hay making and in our case cider making. It was actually encouraged and like you said up until now the best way to handover the farm. Due to chronically depressed wages (what the farm can afford) traditional retirement doesn’t really exist for farmers. As another poster said up thread - you die with your boots on like my grandfather and father in law. You accept these terms of working (endless hours for little pay and time off) on the promise that one day you will inherit. The government have just ripped the rug out from under us.

Something like capital gains tax for example... (which does indeed apply to agricultural land)

I think it would need to be at far higher rates than capital gains tax to ensure land is not sold off and demonstrate that farming is a special case. The public would only accept the abolition of inheritance tax on farms if they were make to recognise this and were reassured that it was not simply a way for large landowners to make money. Maybe farmers could sign up to 80% capital gain tax on the sale of land in exchange for the abolition of inheritance tax on it.

Can't people see that even to explore possible options to minimise this ridiculous tax will place a phenomenal amount of extra stress and cost on farmers. Who are already working 80 hours/week, every week, for a pittance, to feed this country.
Again, winners will be the accountants and solicitors always at the expense of the farmers. Why should they be subject to this?

Because so many people are using farmland as an IHT loophole (see Jeremy Clarkson who has admitted don’t this). It’s is a massive problem.

That's ridiculous. Why should they pay more capital gains tax than random investments?

Of course the public would accept there being no IHT on farms. They already did until 3 days ago. Because most people recognise that farms work differently to other assets, and that they're crucially important.

Most farmhouses are agriculturally tied. This means that they can only be occupied by people in or associated with agriculture.
There Is a process to get a tie lifted (it reduces value of a house significantly) but it isn't simple or guaranteed, you have to prove there isn't a need for it as an agricultural property.
You can't just sell an ag tied Farmhouse with no land to anybody.

How massive? Numbers please.

Or do you just mean it's an enormous problem ideologically (rather than financially)

Wealthy people always find a way, always have always will.
There are better ways to identify them and close the loopholes than tarring the whole farming community with the same shitty brush.

And to be fair yes that loophole should be looked at to stop the hugely wealthy individuals with no connection to farming buying up vast swathes of land for IHT planning purposes, which is driving up asset values artificially - pushing up farm prices well beyond the profit they make.

BUT this terribly thought through policy with the £1m cap isn't doing that is it, it's punching the hard working family farms right in the gut. They are already under so much stress. Even 1 family farms impacted by this is 1 too many.

Because farms are not random investments. They are vital food food security. Farmers can't have it both ways. Either they are are treated like investors and subject to the same rules that property landlords are in terms of both inheritance and capital gains tax or are recognised as custodians of the land and protected from inheritance tax but prevented from making vast sums by selling off land.

I completely agree.
Where are the people who farm the land going to live? The farmhouse and the land/yards/buildings are all intertwined. Living offsite but needing to get up multiple times in the night to calve a cow or lamb a sheep wouldn't work. We live and work in the same place. Suggestion of a static caravans is ridiculous. If that’s the case house builders should call it a day and new builds will now be statics.
And who is going to want to buy and live in a farmhouse next to a working farm? Lots of smells and noises that I imagine would be off putting to a lot of people if it were their day in day out home. And let’s not get started on my cold farmhouse with no central heating and a solid fuel Rayburn which heats one radiator when lit.

I'm a former. 'Luckily' we are a very small farm and won't be affected, so it's easy for me to say I'm not convinced it is totally a bad thing.
However- Clarkson is a vile POS, I am fully in favour of him paying through the nose and fucking off back out of farming. He's an embarrassment and I am disgusted to be associated.
So yes- tackling the investment owners who were exploiting it is needed. Accidentally obliterating bog standard family farms in the process is needless and thoughtless

Those saying one farm in too many-Governments have always introduced policies where someone is worse off. Like parents dependent on Sure Start centres. Like poor kids who depended on EMA. Like potential nursing students who no longer get bursaries. Like people earning above the 50k threshold paying more tax due to thresholds not going up. Like one earner families being penalised by child benefit changes. As I understand it, most family farms will not be affected by this change but it!s a deterrent to people buying up ‘farmland’ to dodge tax. There are ways for people to mitigate this tax if they really want to-like lifetime transfers.

Not all farmhouses are mansions, many are just cottages already and not many people would buy just the house in the middle of a noisy, busy, farm complex of cattle sheds, tractor houses silage bins, pig sheds, etc, up a muddy track from a minor road. And where does the farm cottage materialise from?

I think most of the farming community are baffled by the suggestion that its only going to affect a few farms. It will impact on most of them and the Government has seriously fudged the numbers on it including many 'farms' at the bottom end that aren't proper farming enterprises but are people who have a few acres and a couple of sheep.

All the other people on your list aren't working 70 hour weeks for little return to feed the country. The 'social contract' farmers had with the government that we would keep producing food and selling it for less than the cost of production to maintain food security on the agreement they left our farms intact on our deaths for the next generation to continue to farm the land has been annihilated

We all have a ‘little farm workers cottage’ on the edge of the farm. 🤦🏼‍♀️

They can, really.

They can have an exemption from IHT because that tax uniquely destroys farming (unlike breaking up a share portfolio) and that harms everyone in the UK.

And it can have the same tax as everything else when sold as an asset.

There's no contradiction in that.

It would be great to stop rich people using it as a tax loophole - but that isn't worth destroying farming for. Especially since there are plenty of other ways for rich people to shield their money from IHT, so they'll just switch to something else. Leaving family farming in ruins.

Sorry, that was a reply to @Samphire44

Well, Dyson bought 26,000 acres and another wealthy businessman owns 133,000 of land, all to avoid IHT.

What happened pre 1992, when no exemptions for farms existed? nothing at all, they paid the tax and/or used tax avoidance measures, most still in place & another 18months to put measures in place.

We all, i assume, would admit public services are a mess, yet no one wants to pay any extra taxes.

We can all moan and say we are a special case, i'd like to leave the family home to my DD, without any IHT payable but its not possible, i can no longer leave my pension to her either, IHT free.

Farmers should just suck it up, instead constantly moaning, most voted for Brexit but now moan they don't get CAP payments, talk about a very stupid sector.

I think there is a contradiction becuase on one hand you are saying we should not be breaking up farms but on the other hand you are saying it is ok to sell off land for a profit. Either we should be protecting them or not.

We can all moan and say we are a special case, i'd like to leave the family home to my DD, without any IHT payable but its not possible, i can no longer leave my pension to her either, IHT free.

Oh I'm sorry, I didn't realise you were doing an essential job propping up the infrastructure and health of our nation.

The 'social contract' farmers had with the government that we would keep producing food and selling it for less than the cost of production to maintain food security on the agreement they left our farms intact on our deaths for the next generation to continue to farm the land has been annihilated

I think this is interesting.

There are lots of these situations, where people accept something unfair that works against them because it's balanced by something else which works in their favour. Often the balance is still against them, but it feels like quid pro quo and that makes it acceptable.

If the government destroys all the little quid pro quos - because on paper, if you consider only one side of it in isolation, it doesn't seem right - then people start getting really angry at the injustices against them which they've accepted until now.

Humans are profoundly social. We accept a certain amount of injustice against us to promote social harmony (and because we can't do much about it). But if we feel it goes too far and society isn't valuing what we're putting in then that's a huge problem.

The NFU and the farming press estimate that the farming community broadly voted in line with the rest of the population on brexit actually.

EU subsidies have largely been replaced with Environmental Land Management schemes which are already reducing the productivity of British farmland exponentially. It was already a worry for food security how much farmland was being turned over to tree planting and solar panels even before this announcement.

I can only speak for our farm but dueo to environmental schemes we have gone into and the very good prices we are getting at the moment because of reduced supply the loss of EU subsidies is having minimal impact.

Perhaps consider that farmers aren't 'moaning' and that what is happening is that the people who produce the food you eat three times a day are waving a massive great big red flag trying to point out that if there's no farmers there is no food!