Why are a tiny number of rich farmers dominating the news cycle?

[InvisibleRadiator]

I've been reading around this inheritance tax issue, and the more I read the more I agree with government policy!

For starters the government thinks this will only affect the 500 richest farms and some think this could be as low as 100 farms!
x.com/DanNeidle/status/1852064433738256394

How on earth have such a rich elite managed to whip everyone up into such a frenzy, making it sound like poor old farmer Giles's kids are going to have to sell the family farm when he dies.
The following article explains how when taking into account the IHT property exemption, a married farming couple would not pay IHT unless their assets exceeded £3 million!
www.independent.co.uk/news/business/inheritance-tax-farmers-protest-maths-b2649181.html

And there are so many concessions such as having 10 years to pay, and being half the rate most others pay! And there are many ways to legally reduce the impact of the tax.

It's clear that wealthy investors have been pushing up land prices, and apparently farmers are involved in less than half the land sales now, when compared to 15 years ago.

And now this tiny band of super rich are trying to plead poverty? I don't believe a word of it.

This final article puts it far more eloquently than I ever could.
www.theguardian.com/commentisfree/2024/nov/17/farmers-have-hoarded-land-for-too-long-inheritance-tax-will-bring-new-life-to-rural-britain

Good on Labour for standing up for the average person and trying to claw back a tiny portion of generations of inherited wealth for our public services!

I vote Labour and I am desperate for Labour to have a proper agricultural strategy that prioritises food security and environmental stewardship. This is terrible. They must reverse this policy.

Agree @SugarIsHardtoAvoid - so many of Labour's tax increases have been rushed in and with a bit more thought could be much better.

@ElaborateCushion farms don't have the capacity to sell off bits of land and remain viable.
You need more acreage than you think to turn any profit.
Also anything they do sell will be liable for capital gains tax as well as IHT! So to pay the bill you're looking at selling 30% of the farm every time someone dies.

Other businesses are slowly waking up to the realisation that BPR affects all business

Agree with both. A few months consulting, listening and educating themselves could have made a world of difference. We could have had a thoughtful, nuanced, appropriate tax regime. As it is, we have this.

That's funny because most of the farmers I know are really struggling. One of my farming friends had to ask for help last year to buy new school uniform for her kids - the go to the local village school not a private school.
They don't have a new car. It's 15 years old and in desperate need of replacement.

Agreed. And the government are capitalising on that ignorance. And it's working!

Why can't a farm be made into a limited company then it can be sold as a business to family members (at a low cost)? After all, at its heart it's a business.

A Limited company is subject to Business Asset Disposal Relief and has tax to pay on it. This has also been increased from next year as well.

@AMFA that's ok that you don't see them. But I do. My dd is in a private school. Of a class of 14 two are farmers children who drop off and collect their children in fairly new 4x4s.

@BunfightBetty no I'm definitely not saying that. Like I said 'not all farmers are poor' and I completely agree 'not all farmers are rich' either. But there are rich farmers.

You can't split a farm easily to pay inheritance tax but that's the same with a lot of businesses. The money has to come from someone - is there a better suggestion as to where?

Thanks for the response @friendlycat.

Surely farms should pay some sort of tax when selling up or handing down? They can't dodge all versions either though business taxes or IHT?

Yes the private non-farming investors that caused the land prices to rise so ridiculously in the first place and hoarded land from food production.

They are the ones who will just melt off and find another loophole to exploit

Oh, I know, don't worry - I'm on the farmer's side in all of this.

CGT is, in theory, only payable if the land sells for more than it was valued at for probate, and only on the increase, not the total proceeds, but still, it is a valid point.

I was just expanding on the point that other family owned businesses are also potentially impacted severely by this too, without a chunk of land that could, theoretically, be sold off.

I realise it's a much more nuanced situation than that, but it was just to highlight that it's not just farms that are affected.

I know many family run businesses that this will affect.

@ElaborateCushion unfortunately that's not always necessary the case re value at probate. In some situations capital gains tax will be applied at the increase in value from when the deceased took ownership of the farm. So for some 60+ years ago.
So there could be huge amounts of capital gains to pay!

It's all a bloody minefield! To those saying there are ways round it. Yes there are but there are literally so many holes to fall into it's impossible. It's utter madness

@ElaborateCushion I don't think the impact on other family businesses has been realised by those businesses yet.

This budget could be as catastrophic for the UK economy long term as Lizz Truss was!

Yes, there are better solutions. Reeves and Starmer have both said that this tax won’t catch many people per year. So it clearly won’t be a money-spinner of any worth. It will just create misery for those it does catch and increase food prices and food insecurity for us all.

Not clever in the slightest.

Why increase food insecurity for the nation instead of cracking down on tax avoidance by large companies? You know, the kind of businesses who do 99% of their trading here but have their HQ offshore to minimise tax? The likes of Boots or Heathrow Airport. All the money and profits being generated here, but hardly any tax being paid on it.

Put that together with a budget that’s likely to stifle growth, at a time where you need growth to grow tax revenue, and it’s looking like an utter shambles.

Do you think the tax raised from farmers will be worth the price we’ll pay for food insecurity and losing our farms to large multinationals who’ll be offshore for tax purposes?

My dd is in a private school. Of a class of 14 two are farmers children who drop off and collect their children in fairly new 4x4s.

Wow. So based on two in your child’s class you’re willing to talk about all farmers being rich. That’s quite the leap.

Just to say I come from a farming family but the farm was sold before my parents died to pay for their care as neither me nor my brothers wanted to go into farming. What I would say is I watched a Newsnight interview last night with a farmer just back from the protest in London. He looked for all the world a ‘gentleman’ farmer in his attire with the interview taking place in his large farmhouse kitchen (similar to ours back in the day) with a large Aga in the background (just like ours back in the day) that is very expensive to keep running so before pleading poverty at least be mindful as to how it all looks to the outside world!

What about the 60 year old farmer, farming the family farm, which is owned by his retired 90 year old father. Even if ownership is transferred now the chances of the father living another 7 years is really slim.
And I'm pissed off with everyone saying "It's not fair, we have to pay so farmers should too." Less than 4% of estates need to pay IHT, so most people don't have to pay it. The average house price in the UK is under £300,000. It is not comparable.
I think that the protest was tone deaf when the average person is struggling. Instead of holding signs that say "No Farmers, No Food" and expecting the public to understand what it means, farmers should teach the public what it means. As a dairy farmer I would be happy to pour away milk for 2 days if every other dairy farmer did the same.

Doctors, nurses, teachers, train drivers can strike but farmers can't, even if farmers deny access to produce they still have to work, animals need to be cared for they can't be ignored. There is no sick pay, holiday pay that most people can expect, it is a 365 days of the year job, any time off requires cover that the farmer has to pay for. The hours are stupid. Yes, it is a choice and very few are aware of the reality. Many people work 60 hours a week but many farmers work twice this with no let up. I'm from a non-farming family and have been married to a dairy farmer for 20 years, I know that I do not have the expertise, knowledge and physical strength to continue the farm if anything were to happen to my husband. Working alongside him for 20 years does not qualify me to run the farm so everyone saying let other people have a go/chance knows nothing of farming.

I'm trying to get some form of educational video together to help educate the public on exactly why this budget is a catastrophe.
So many people just don't understand farming at all.

I mean really we should just have taxes on people in 4by4s, why bother with impact assessments at all, labour don't!

So now we're basing someone's wealth on how they look? Really?
An Aga is often the cheapest option of heating a farmhouse. Most farms are not connected to mains gas. So either they buy in oil or they burn wood off the land. Yes oil is expensive but what other options are there. Changing a heating source in a farmhouse is not that easy not to mention expensive! Lots will be listed too so limited to what you are allowed to do.

If the farmhouse has been inherited and has a large kitchen, what's he supposed to do? Knock the house down so it looks 'better'?
It didn't look as if it was full of new cabinets and equipment, either!

Equally though, can't people grasp that it is pretty hard for people who can barely afford to rent a home (not me, but many of the people I work with in a voluntary capacity) to sympathise with someone never wanting to be taxed on inherited wealth. I'm afraid anyone inheriting millions needs to pay their share..just as those who work day in day out and will never inherit a penny already do

It's weird to plead not wanting to pay tax on land you inherited and stand to pass on again. Just accept this makes you far more privileged than the majority. I didn't like paying income tax as a single mum skipping meals to pay the mortgage. But I accepted I was still privileged compared to many.

@notanothernamechange24 Well done you! you’ve got it! If you’re trying to persuade people of a particular point of view (eg poverty) it’s pointless arguing a perspective if you’re showing something that doesn’t fit your narrative!!

I sympathise with the initial, knee-jerk reaction. That's understandable when your own day to day life is so tough. Nobody should be in that situation in this country, IMO.

I don't sympathise with anyone who maintains that view once they've understood the threat this poses to food security and food prices. That's just really thick. It's cutting your nose off to spite your face, just because you resent the idea someone might have more than you. And you resent them so much you don't even engage your brain to critically appraise the new information you've been given.

I don't have sympathy for that, no.