UK Farmers

[SunQueen24]

Can someone please explain to me what today is all about?

I think the frustrating thing for many farms/farmers is the lack of discussion and the incorrect assumptions being made. There could be other ways around it such as having a higher corporation tax rate for family farms which have been inherited as their way of ‘contributing’ etc. Like someone has said it’s a sledgehammer to crack a nut.

Personally I’d just abolish iht in all its forms and make income from inheritance at any amount subject to CGT. It’s a capital gain ultimately. Would raise a whole load of cash.

I think this is where the disparity comes from. Some farmers have managed to diversify and are doing well, others have been left behind and are struggling.

I think it is a combination of the Islington liberal classes not understanding that farming is not just about Jeremy Clarkson and the Cotswolds set and the fact that there is a bit of a divide now between the north/Wales and the south when it comes to farming (ie who does the actual work) and land ownership.

There is a fairly big issue in some parts of the UK where very very wealthy people (who are the only ones who can afford to buy it) own farms partly to ensure the rural views from their stately piles are not built over by developers and partly because there are tax efficiencies. They do no actual work as the land is farmed by actual farmers - think Caleb rather than Clarkson. The actual farmers can't afford a farm in a million years. This is the farming picture in the Cotswolds which is what your typical Islingtonian thinks of when you say farm. In other parts of the UK the picture is very different with farmers owning their farms which may well have passed through several generations of the same family and are probably on the bones of their arse trying to keep their heads above water. I suspect that a lot of the latter won't fall foul of the £3175000 cap.

I doubt this will be much of a money raiser as there probably aren't that many farms a year that fall into this category. As a former tax advisor I can see quite easily how you could plan to pass on a share in the farm each year to the next generation to get the lifetime giving exemptions. As for the wealthy landowners OP is thinking off - I'm sobbing into my cornflakes if they have to pay tax

Why shouldn't they they pay inheritance tax. Everybody else has too.

@Viviennemary because you would have to break up part of the business to pay the IHT which might then mean the farm is no longer viable.

There was another relief that helped other businesses not just farming

that's not true - if some farmers have to sell land to pay the tax then their farms might no longer be viable. what is going to happen in the future - each new generation of farmers need to sell off land to pay tax?
If farmers wanted the money rather than wanting to be farmers they would just sell the farm. They want to be farmers and they need land to do this, we need them!

This should be clamping down on big businesses and very wealthy people who buy up huge swathes of farmland purely to avoid inheritance and other taxes. The small farms that are sold to pay inheritance tax will be bought up by more big business.

The small farms, like my dad's, 200 acres, he just about scrapes a living from (v old 4x4, no house repairs etc) will have to be, at least, partly sold off making them even less viable, even using less traditional ways of making any money on that amount of land. Changing the face of the countryside forever. The image of all farmers earning a fortune is massively exaggerated.

That’s true. But there’s also a hell of a lot of farming land becoming development land where I am. Also land being sold and then leased so developers can land bank. So this argument doesn’t hold all its weight.

So really the sums re what constitutes a large estate need to be accurate so farms like your fathers aren’t captured.

As far as I understand it, one third of children in this country live in poverty and full time workers like NHS nurses are needing to use food banks. farmers have been given extraordinarily allowances which allow them to pass up to three million onto their children tax free (in context: about 100 years average salary), and pay only half the usual rate on their estate over 3 million. But they feel this is not generous enough and that they and the celebs who were using agricultural land as a tax avoidance scheme should be entitled to pass on unlimited wealth tax-free. Because (a) they are special, don't you know, and (b) Only the little people pay taxes.

@Scrowy as a tenant farmer, it does depend on the owner of the farm what their situation is - you're lucky if it's council owned, but if your farm is one of a few farms owned by a farming family, your farm could be the one to be sold to pay IHT - which could mean changes for you (depending on tenancy terms etc etc).
Hopefully won't affect you.

Quite a lot of rural farming children live in poverty @notquitetonedeaf. Like I’ve said, I think most family farms are quite chilled about changes to the rules to ensure they’re not exploited by hobby farms and bankers (which they undoubtedly have been).

The point is will this affect food security, and the answer is it might well. That is something for everyone to be concerned about. You’d think after the energy crisis people would be more mindful - we are already too reliant on imported food and too low skilled as individuals. If we have a year globally at any point with bad harvests everywhere (not unlikely within 30-40 years with climate change) people across the world would face food shortages and hunger.

It was a political decision because someone in the government thought along the lines farmers = wealthy landowners. The reality is that some farmers are well off but most are not. We need farmers to produce our food within the UK otherwise we’ll have to import a lot more.

The biggest insult of all was to suggest that the recent budget was to help ‘working people’. Nobody works harder than our farmers! (I don’t know any farmers and I don’t live rurally, but I can see how unfair this policy is)

Out of interest (as someone who really doesn't know what a farm would be worth), what would your dad's farm be worth, roughly?

Am confused - I thought it was Inheritance Tax, not Capital Gains Tax. What am I not understanding here?

Only if planning permission can be obtained for it. And if planning permission ca be obtained the farmer would sell it anyway. The amount of money that can be gained if you can get residential planning and then sell it to a developer is immense.

There’s lots of land sold prior to planning, developers hedge their bets and “land bank” some they will sit on for a long time but it all balances out in their portfolio. We have land either side of our house which isn’t farmed and is being hung onto just incase. If it doesn’t happen in this lifetime their kids will just inherit it and hopefully build then.

Probably a bit over £2 million. He may well leave if to the dogs home if he's feeling that
way out, so may well not be my problem anyway!!

Not a chance. The scale of farming is increasing all the time especially when it comes to arable production. Technology has driven efficiency gains in agriculture since time immemorial and coninues to do so. A farm that would have supported a family 50 years ago will nowadays be far to small to provide an income and that process is not going to stop.

It’s another poorly thought out Labour policy that will come back and bite them on the ass just as the private school VAT will.

The seven years before death rule of course is quite right.
Farmers, however, unlike the rest of us haven’t been given seven years as this tax comes into force in 2026 not 2031

@GrazeConcern quite a lot of children in rural communities live in poverty. I know - I grew up in one of the poorest rural areas in the UK surrounded by these kids. But the ones whose families owned farms were without exception affluent.

As if these massive dukedom landowners actually care about small farms. They're just outraged that the oiks are telling them to put their hands in their red trousered pockets. It's a very good illustration of what "entitlement" really means, in the fullest sense, and I hope that people pay attention to the quasi feudal setup that we still have in this country, now that the ones who own us all are helpfully putting their heads above the parapets and showing us who they are.

I think someone in the Government thought
Farmers = they don’t vote for us

No. They can buy up pockets of land to meet biodiversity requirements imposed on them. It just has to sit there in a portfolio of assets.