Do I agree with farmers?

[JudesBiggestFan]

I'm generally politically aware but on this issue of farmers' inheritance tax, I can't decide/figure out from the media coverage if it's a good or bad plan?
Jeremy Clarkson's involvement has not helped me feel any sympathy for farmers , but I may well be wrong! For all the protest and hullabaloo...is it worth doing?

@Maddy70 thank you for this. It sounds eminently fair and sensible. I've read through all the arguments for and against and it does seem a well considered policy on the whole. I'd understand why those affected would be upset but outside of those people, I don't see any downside. As someone from a working class family who will inherit some cheap costume jewellery if I'm lucky, it seems insane people can inherit up to £3 million and still be complaining.

@Bunsandbins no it's not! He has tried to abuse a loophole in the system and maybe if he wasn't so vocal in what he had done, this tax wouldn't have been put in! His arrogance is testament to the mega wealthy in this country. I feel sympathy for those struggling by farmers it willl actually impact but sadly they should have chosen a better spokesperson!

This is exactly what I'm struggling with. I've read the proposed law, I've read a couple of articles and I'm seeing all the unrest on social media. Who is wrong?

@SwordToFlamethrower yes everything will be valued and taxed so whatever you own as a farmer you will have to give 20% of the value of that to the government. I don't know many businesses, especially ones what traditionally have very small profits, which could afford to give the government 20% of everything and continue functioning.

This is also about the message and optics of labour for me. They seem to be getting it wrong with everyone - pensioners with the WFA, all the weird donations, farmers with this. It feels like our own government is against us as a country. I don't know who they're backing or supporting at this point.

There are certain groups of people in society who have become untouchable because they've managed to convince everyone they are very poor.

For example, pensioners hold 85% of property in the UK, with 27% of over 65s owning a second home, and yet we are clinging on to a stereotype about a WW2 veteran eking out the pennies to pay for a microwave dinner.

Farmers are another group which we are repeatedly told are on the breadline, and yet every farmer family I know (and I grew up in a rural area and have met a lot) has kids in private school and a very nice house. I've never met a poor farmer.

Maybe Labour knows that there's a significant chunk of the population getting a bit sick of people being given handouts and tax breaks to compensate for their poverty when we can all see that they clearly aren't in poverty.

One thing which I heard being said is that in reality, we, the general public will pay the IHT for farmers.
In order to plan for IHT they will need to charge more (where possible) then the supermarkets will charge more and we will pay.

The most sensible suggestion I have heard so far is the early poster on this thread who said a sliding scale for IHT depending on how long the family member farms the land for after inheriting it.

To add - a lot of labour's money making policies seem to be ideological rather than practical and when modelled look as though they'll cost more than they'll raise.

WFA - a paltry amount in the grand scheme of things which some experts argue will lead to increased illness and strain on the NHS. Plus the cost of processing the changes is huge.

VAT on private schools - will lead to an increase in number of children using the state system which will cost more for the country and lead to school closures, plus we don't have enough teachers or classrooms to cope.

IHT on farms - family farms bought up by foreign investors, food security in the UK compromised, UK more and more reliant on importing food which is worse for the environment and of a lower quality.

NI on businesses - will reduce employment and wages.

These policies all seem to be more about the values of Labour and less about what's good for our country and economy.

And it's not 20% of everything. It's 20% of everything OVER a very high amount.

@MrsSunshine2b when I said everything I meant that it's not just land, it's everything needed to run a farm.

But it's not 20% of all of it. Depending on your circumstances, somewhere between 1m and 3m is still completely tax free. On a farm worth 1.5m, it's 5% of the value, which can be paid back over 10 years. 0.5% of the value per year for 10 years is hardly a crippling amount.

@MrsSunshine2b it is when these businesses aren't generating that in profit. Ultimately you're selling off assets, which affects how much profit you can then make. For so many of these businesses it renders them unviable. Many farms are owned by single people as well not all farmers are married and can double their allowance.

People don't seem to understand how little profit these family farms make and how much all the business assets are valued at.

People will latch onto a cause and then fight for it, because they only see the surface level.

I've done it myself with trans ideology. I was a libfem for several years before scratching a bit deeper and realising to my horror what was happening to girls and women's rights and opportunities.

I see the same kid of thing here. Of course everyone knows that farmers need to farm and we can't live without farmers!

But you scratch a bit deeper and see... hmm actually, this is meant to be targeting the Lords, Dukes, elites and billionaires who are leeches, hoarding land to avoid tax.

More digging needed... pun intended.

Such a good point yes.

Farmer Giles who drives an £85k land rover, can claim that as part of his essential farm equipment and not have to pay tax on it. Clothing, food and drink too, I expect.

I'm just not buying it. As I say, I'm yet to meet a poor farmer. And I also don't believe that 95% of your land doesn't make a viable farm, but 100% does. There's a farm near us, claiming that they will lose land that's been in the family 500 years. They hold farming lessons a few times a year which are always fully booked at £10 a kid. In order to obtain tickets for strawberry picking and pumpkin picking, you need to be logged on and waiting before they go on sale at noon 3 days in advance, and you have approximately 30 seconds to checkout or the tickets are sold. It was easier to get Taylor Swift tickets. The cafe and farm shop are always packed, along with a garden centre which is always full. It's a very profitable business and "farming" is only a small part of what they actually do- if anything, it's more of a tourist attraction or a day out. I'm sure it's worth millions and like any other thriving business worth millions, they should be paying inheritance tax! The fact the burden is lower on farms than on any other business or property, and that there is 10 year interest free period to pay, accounts for the fact that many farms hold a lot of non-liquid assets and families would prefer not to sell them.

If your brother has a wife they would have

1 million pounds main residence relief
1 million pounds each farm relief

So an amazing 3 million pounds of IHT relief

I have a disabled son ( as well as a daughter )
and would love to provide for him but we just get the 1 million pound relief - that’s it.

@MrsSunshine2b

You clearly don't know many farmers or you live in a very affluent area.

Like I said upthread, it's probably not possible for a farmer to sell off 5% of their land - someone buying that land needs access you can't just sell off random fields.

This entirely.

Because you can't just sell 20 acres generally. As a pp said - there are issues with access to it, it isn't divided neatly into 'plots' like this. His smallest accessible field (on a country lane) is a 43 acre - which then takes the farm down to a level that isn't viable to run/make enough profit for a family to live on.

And people don't want/can't afford to spend £200,000 on a 20 acre field in the middle of nowhere. What would they do with it? The only person it's any use to is a neighbouring farmer, who probably doesn't have the cash/need for an extra 20 acres.

People in towns genuinely don't seem to understand. You can't just carve up small bits of a farm, in many country areas, to sell to pay tax. You'd have to put the lot up for sale, with the farmhouse.

I assure you our accountant (let alone my conscience) would have something to say about that!

agricultural land will generally have an agricultural tie. You cant just sell it to be used for other things. Who is going to buy it other than your immediate farming neighbour (who is probably facing the same issue)

I get it, this is yet another poorly thought out and rushed in policy. As for the 'i've never met a poor farmer' average farm profits are £49k per year according to the bbc, which also says these numbers are too high as lots of lower earning farms were excluded, and that farming is a low profit business.

So less scope to save up money to pay tax.

Something better and more considered could've been done to exclude people who genuinely want to keep farming across generations and not for huge profits.

This is the best post I have seen on the entire topic across multiple threads.

Can I ask for some background on "These old farmers have been told for 30 years not to gift"? 🙏

Sorry, £45k profits.

Government research suggestss_
that an average farm last year made a profit of about £45,300, although that may be overstated as it is based on a survey that excluded farms that bring in the least money.

Other government figures suggestt_
that the average return on capital for farms (the amount of value farmers can extract from things like farmland and machinery by growing crops for example) is only about 0.5%, which is low compared with other businesses.

I agree completely and we have family in the same situation. The money is on paper- to pay the tax they’d need to sell land which would make the farm too small to be sustainable

Stolen from elsewhere:

The basic facts are thus:

• For a long time there has been a tax relief called Agricultural Property Relief (APR) that allows farms to be passed to heirs completely free of Inheritance Tax regardless of how much it was worth
• In recent years wealthy individuals have been taking advantage of this by buying up farmland to store wealth and pass it on tax-free. As one of my clients (who is in a position to know) put it: "James Dyson now owns Cambridgeshire"
• This is obviously not what the tax break was intended for, so the government has reformed it
• From April 2026 people can now only get a maximum of £1 million of APR on farmland they inherit
• This relief 'stacks' so both members of a couple get the £1m of relief and it passes from one to the other on the death of the first
• And it comes on top of £1m that a married couple gets for their overall assets including their main home
• So the total IHT relief for a married couple with a farm will be £3m on the second death
• The IHT they pay on the farmland will be 20%, not the 40% that people pay on other assets
• And they are allowed to spread that tax bill over 10 tax years
• HMRC estimates that 500 estates per year will be affected by the change

A worked example. I and my wife own a farm worth £5m, plus a farmhouse and the usual other assets worth £1m.

When I die, my wife gets my share of the IHT relief that everyone gets, plus my APR share, meaning she's got £3m of IHT relief in total. When she dies, all our stuff goes to our son Lucifer.

For easy maths purposes, our house and non-farm assets are worth £1m, so that's all covered by relief and no tax is payable. The farmland is worth £5m and £2m of that is covered by APR. That means £3m of it is taxable at 20%. Lucifer owes HMRC 20% of £3m, so £600,000. He's got 10 years to pay that over, so an average of £60,000 per year for a decade.