Multi Millionaires Complaining Again

[ARealitycheck]

I see our multi-millionaire landowners had another moan today at a labour party conference. Oh the woes of having to pay half the tax over a period 8 years longer than the rest of the public.

https://www.bbc.co.uk/news/articles/c2ljdvqegkeo

Not a good look when the spokesperson is the owner of a farm obviously worth £5m who has been in receipt of circa £90k subsidy money annually in recent years. While standing in front of machinery that is built anywhere but the UK.

There are reasons why some farms may be run as a sole trade or partnership. However, they can still start to transfer assets to the next generation (exactly as many non-farming families do) to minimise IHT payable.

Of course there will always be families struck by the tragedy of a sudden terminal illness, but the new rules encourage families to plan ahead so the next generation are not like Prince Charles waiting until his 70s before he was able to take over from his parents & inherit.

Exactly this. Farmers should be blaming people like James Dyson and Jeremy Clarkson who deliberately bought farms as an IHT dodge. Most farms will be completely unaffected as they aren't worth enough, and any that are really should be being run as a limited company anyway.

Farming families can still pass on the farm tax free to the next generation under the 7 year rule. This tax will catch Jeremy clarkson and co who bought farmland purely as a way to avoid tax.

WTF does that mean? You do know how many people work for the NHS dont you? And how many people in this country are retired? What is your solution? Take pensions away from public sector employees who spent their working life looking after the health of others? I saw this article and could not believe they had printed something so stupid.

Something's got to give.

Absolutely this!

I tell you what. Why don’t we all sell off the farmers land, build loads of crappy flats and houses like rabbit hutches on their land and then we can all fucking starve to death because all our food is brought in from abroad and is too expensive to buy as it’s a luxury.
As for millionaires, good grief, you know absolutely nothing about farming.

Agreed

@Seymour5

"And about £1 in £4 of council tax goes on local government pensions, for employees and councillors."

Which council pays its councillors let alone gives them pensions? I thought it was an unpaid role?

What absolute nonsense OP. Bet you walk with a limp that chip on your shoulder is so big.

Apologies, councillors in England used to be able to join the LG pension scheme. It appears that stopped in 2014.

www.lgpsmember.org/your-pension/councillor-pensions/

I do think food stability and the countryside itself are not really being protected by this legislation, although I am absolutely in favour of the wealthy paying their dues.

Farmers aren't all cash poor, so presumably a lot of the issue is just the general failure to tax the rich proportionately by allowing them to rebrand their earnings as something else that affords them lower tax rates.

In terms of the IT on multi million pound farms forcing the sale of parcels of land, it seems like there are obvious solutions to this. Is there a reason we can't make the IT due upon the sale of the farm or upon the farm ceasing to be a working farm? For example, if Farmer Bloggs wants to pass his working farm on to his child who also wants to run it as a working farm, they can defer the IT. When Farmer Bloggs Jr wants to pass the farm onto his child, but that child wants to either stop using it as a working farm OR sell up and cash in, then at that point both sets of IT are due for payment. Maybe there's a reason why this can't be done.

We have NEVER had long term food security, and we never will.

WTF? This is an irrelevant post of nonsense.

Jesus Christ. Talk about bite the hand that feeds you. Can you bear the weight of that chip on your shoulder OP. Have some fucking sense.

Greedy farmers do that already.Selling off pockets of land they don’t want that destroys the environment and surrounding communities.

She is talking sense.

No she’s not, deluded.

A farm worth £5 million on paper doesn’t mean the farmer has money in the bank. Yes he could possibly sell it for money but if farms aren’t profitable who is going to spend money on a worthless business.

You will have more to complain about when we are held to ransom having to import our food from overseas

Labour came up with this legislation because they think people want to “stick it to the rich farmers”
But don’t see that without the “rich farmers” in the long run it is going to be a financial disaster
Like the government, some people don’t see consequences and it is that short sightedness is leading us down a disastrous path

So let’s throw out the farmers to get the big businesses. Who will go and find another loophole to manipulate.
Labour does love a spite tax.

One day people will realise how important food security is on an island. Hopefully they’ll be grateful for us having maintained ours and not be regretting it as they try to secure the dregs and crumbs from other, not so stupid, countries who have valued their food producers.

This. It’s estimated that farms make a 1% return, so that’s £50,000? For all hours in all weather, on call 24/7? Been there, done that, wouldn’t do it again.
Farmers deserve so much more support and respect.

Exactly! I’m not sure the OP understands the economics of farming, or indeed running a business.

In simple terms a moderately well run arable farm will make around £200 ~ £250 a hectare profit, before finance costs and tax. A hectare of average arable land costs around £28k. So, the average return, before tax is less than 1% (0.8%). Out of that needs to come finance costs, investments in new tech/ efficiency/ environmental improvements. But let’s pretend the farm is unmortgaged and requires no investment.

Over a 40 year generational cycle, that means a 30ish% cumulative return. Which, if subject to IHT at 40% is more than the profit that the farm will ever have made, and therefore more than the cash available to pay the tax. The Government have decided that they’ll half the IHT for farms…but that still means for 40 years work, and assuming no mortgage costs, investment or drawings / dividends to the farmer, they be looking at a 10% return over 40 years - 0.25% return a year.

The result therefore is, on death, many farms are likely to be sold

The two possible outcomes then are:
(1) An increasingly fragmented farming sector, as parts of farms get sold to pay IHT and we end up with more, smaller farms, which will be inefficient and lead to higher food prices or,
(2) Consolidation of land (when sold) in the hands of fewer and fewer ultra wealthy, and probably foreign, investors whose long term aim is control of the entire food supply chain.

Neither are great outcomes, and the second, which I think is more likely, is very bad news for us all.

The story is the same for all privately owned businesses though, as they to fall into the chancellors IHT net under the proposed changes, which will lead to the death of private SMEs, and again an increasing consolidation of assets in the hands of the ultra rich.. They just don’t have such a well organised body to vocalise it.

So, be careful where the politics of ideology and envy lead you…

Are you talking about farmers?! I imagine those same farmers who you expect to produce you top level meat or milk or eggs etc for a pittance?

They are not earning a pittance, a farmer with 120 milkers which produce an average 7000l of milk per year, will be making over 100k p.a net profit (pre tax)
Egg prices super high as is lamb.. there is a poster on here who farms sheep, says they ve never made more.

fwiw a diary farmer near me has made over million in the last 3 years, i know this first hand.

This 💯 %