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!

It will be classed as agricultural land unless they have actively pursued planning so for IHT purposes will be assessed as that.

Thank you

There’s lots of people this way who’d love a small holding. If there’s caveats re farming on the land (which we have often round here) then it remains agricultural.

What did farmers do before they were exempt from IHT? I believe it only started in the 90s. Was there another exemption or did they have to pay it at the full rate?

Ok but you still don't need a lot of it to reach £3m especially when that includes the farm house, out buildings, machinery etc.

There (bloody spell check)

I think this is the biggest issue. Tax the Dyson's and Clarkson's who use farmland as a tax efficiency. Tax on sale of inherited farmland. But the next generation cannot continue to farm if they can't afford to hold onto the land.

Ideally there would be a period for some sort of exemption along the lines of if the farm was the primary source of income for the deceased AND was going to continue to be farmed by and forming the primary income source for whoever was inheriting

It's 500 farms per year. Suppose a farmer works on average for 40 years between IHT events. That would mean 20,000 farms are affected. It will not be the same farms every year.

Isn't is 500 farms per year that are affected, not 500 total?

Where does the 500 figure come from?
It comes from the Treasury, which says it expects 500 estates to be affected by the changes each year., external
There were a total of 462 inherited farms valued above £1m in 2021-22, according to HM Revenue and Customs (HMRC), external:
345 valued between £1m and £2.5m
80 at £2.5m to £5m
37 above £5m

Cross post!

Agricultural land was much lower value in relation to the cashflow generated. Since then income have been pressured by the supermarkets booming and subsidies not keeping up and population growth has put constant pressure on land. Farmers now have more valuable land but make less money out of it in order to be able to pay the tax.

My question too
I read that Thatcher introduced APR in the 80s (?).
Was it capital transfer tax before then?

Presumably most of those will now dodge it by giving the land to their kids more than 7 years before they die?

I read on the bbc website that it was 70,000 farms that met the threshold overall but c500 would be affected each year, I.e. the farmer died.

This is not just about people's homes and livelihoods - though farmers work ridiculously hard and long hours often for very little return - but this is about the nation's food security, food prices, animal welfare, our environment and protection of our countryside.

People need to see the macro issue and not just whinge about so-called 'rich farmers'. Selling off land to pay IHT (assuming it's desirable to others and can be sold) will mean decreases in economies of scale for farmers and rising prices for us.

Who would buy the land? Well, perhaps some other individual farmers, but also industrial farmers who don't really care about animals nor the environment. Or developers which takes the land out of food production and can also damage the environment.

I'm not a farmer but can recognise this issue affects us all. I wholeheartedly support them.

Completely agree. There is no way it can be just 500. I know 15 farms affected. It can't possibly be that I personally know 3% of all the farms affected in the UK just from farms within a few miles of where I live.

Given the instability around the world I can’t see the logic of doing something that will potentially reduce the number of farms we have at a time we need to be as self reliant in food production as we can.

It's basic maths. If a business takes in less money than it spends, it goes bankrupt. The real ignorance we are up against is people not understanding basic maths.

Yes I heard a government minister say that earlier - effectively no one needs to pay it they plan the estates - which of course the investment banker farmers can do as well, and of course they can afford for the tax advice to achieve this as well. But if everyone can dodge it what is the point of putting it in place. Should it just be considered as a tax on unorganized farmers.

There is a lot of misinformation in this unfortunately. Inheritance tax is disgraceful anyway in my opinion but this will destroy British farming. There have already been suicides to avoid families being forced to sell their farms as it is not imposed until April, that number will rise. Farms valued at 3million is not the same as having 3million in the back!! Many farmers are cash poor and they will have to sell their farms in order to pay the tax. They then have no home, livelihood or purpose. All to pay a tax on money that was earned and taxed already!! It’s absolutely awful and so sad for farmers and the public who will suffer the consequences when there is no more meat, dairy or other farm products available at a reasonable quality or price because we are having to import from overseas - many of these imports will have lower quality standards than than UK so taste/price and animal care will suffer. This is a terrible situation for everyone. You may think this won’t affect you and only ‘rich farmers’ but it certainly will.

IHT was not intended to be a revenue raiser, it was intended to force redistribution of wealth from those who are simply saving it to those who might actually spend it e.g by passing it down a generation or to charity. Anyone giving wealth and benefiting from the seven year tapered relief is not "dodging" IHT, but doing exactly what the tax was designed to achieve.

I know very little about farming but this IHT policy seems like madness.

However, genuine question, can farms not become limited companies and avoid IHT or would that have consequence elsewhere?

There's some staggeringly ignorant assumptions being made here about farms.
I do the accounts for one of the farms near me.
They have assets of around £2.75m.
Assets- land, livestock, agricultural vehicles, house.
Their income is poor. One of the sons does bar work to help make ends meet.
It's a killer of a profession.
Supermarkets dictate the price of produce to the farms, not the other way round, just so f*ing Tesco and the like can keep prices down for the baying hordes looking for a bargain.

Of course lots of people would like a smallholding. Not many would want to farm the area for Wheat or Oil Seed Rape or the stuff the country needs grown efficiently in bulk.

Farmers are cash poor and only 'rich' in the sense that they have the asset of the farm itself, which they naturally want to continue as family farm when passed on to their descendants, in the same way it was passed down to them.

Unless those commenting have been brought up in a rural community, they have no way of understanding what life is like for people living and working in the countryside.

They don't like it up em.