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I remember such conversations being had in public, on phone ins like the one I was listening to today...
[News] Farmers
- Thread starter Harry Wilson's tackle
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I have very little sympathy for farmers being outside of any inheritance tax.
However, I do not like the Government fiddling around the edges with using taxes which are highly targeted to certain groups. Bite the bullet and put 1p on income tax instead and share the load.
However, I do not like the Government fiddling around the edges with using taxes which are highly targeted to certain groups. Bite the bullet and put 1p on income tax instead and share the load.
- Jul 10, 2003
- 27,791
I'm guessing the 'how IHT caused the demise of UK farming and lack of food security' call in will be after the 'how Brexit caused the demise of UK farming and lack of food security' and the 'how Truss caused the demise of UK farming and lack of food security' etc etc
bluenitsuj
Listen to me!!!
Bold Seagull
strong and stable with me, or...
I also imagine this is where the problem is for young people - farmers not sharing ownership of their farms with their families or loyal young workers until they die.
If the average farmer is 59, then I suspect his children are between 30 and 40 having worked their arses off most of their lives to have no asset or ownership.
So you also have farm hands, farm managers etc. who can be loyal to a farm their entire lives with no share of assets or profit from the business either. In so many other businesses you can be made a partner or director and have a share of that business. Again no wonder young people think to themselves I could work a farm my entire life and having nothing to show for it.
Time farmers thought about their business and succession models - not sure the problem lies entirely with government and taxation.
Thunder Bolt
Silly old bat
This seems to clarify some things
ROSM
Well-known member
Greece charged 23% vat in the last decade.
There isn't actually a block as I understand it but it's about national consistency in so much as in the eu they either all do or all don't.
The reason why they don't all do is about how schools are maintained in as much as some countries will give some maintenance even to fee paying schools in the absence of full state education.
- Jul 10, 2003
- 27,791
The government said about 500 claims each year would be affected by the changes and farm-owning couples could pass on up to £3m without paying any inheritance tax. It said its "commitment to our farmers remains steadfast".
https://www.bbc.com/news/articles/c...d about 500,to our farmers remains steadfast".
ROSM
Well-known member
Also don't forget that the value is derived as farm land not development opportunity land. Land may commercially be 7m but its value as farmland will be lessIn the same way most people can pass on £1m tax free before IHT, Farmers have special dispensation whereby they can pass on £3M before tax. And, on the remainder, instead of paying 40% tax, they have a special dispensation whereby they only pay 20% tax. So, on £5M it would be approx £400,000 which due to the further special dispensation to pay over 10 years, ends up at c40K pa, and that's before their accountants and standard business practices get hold of it.
My kids, in a similar situation, but me not being a farmer would have to pay £1.6M immediately
Ahem ... £7M
If your property was your means of running your business that is handed to your family, then the need to sell to pay iht is the end of that business.I think they are entitled to engage with this, of course, but there is a strong whiff of entitlement from some of them.
Yes I have a good pension but if I wanted to pass on a million pound property (I don't have a million pound property, by the way) I would be clobbered in tax. What the farmers are being asked to pay is a fraction of that.
I simply can't see London's finest flocking to support these people today when they rock up to protest. It is about proportion and perspective. If there is grievance then negotiate.
(and before I'm accused of some sort of left wing nonsense, I was deeply mocking of my own (former) union when some of the picket line stood grinning with Jeremy Corbyn a couple of years ago. A totalmoment)
Weststander
Well-known member
Succession models.
Farmers pass on their farms to their offspring, often through generations.
It worked.
- Jul 10, 2003
- 27,791
And they can continue to do that using the exact same methods every other Family owned business has to, to avoid it having to be sold
That 'few tens of thousands profit' is generally after many of the expenses that you & I pay out of out take-home pay. Like fuel, vehicles, housing, some clothing, and so on. If I had £10k left after that, then I would be pretty happy.
Change 'will be' for 'may be'. Not many farms up this way are worth £3m, let along £5m. And as part of the value is the inflated cost of land because of investors like Clarkson spending over the odds - then agricultural land prices should stall or drop - lessening the overall 'value' of the land. And as farmhouses are tied to the land they are valued at a lot less than the same house unencumbered by the farmland. Like shops with a live-in flat above them tied to the shop - they sell for a lot less than an identical flat on it's own. Commercial properties are far cheaper - which is why when they get change of use to dwellings the value shoots up (see country pubs).
Because they didn't need to be - because there was no IHT. What will happen now is that succession planning will come in, and the number of genuine farms caught by IHT will drop further. But it will stop the land-bankers from gobbling up the land.
Not strictly true. The vast majority of farming activities (such as erecting sheds and so on) are still permitted development. And things like diversification into holiday lets and so on is positively encouraged. The only main difference is that it is harder to get change of use from farmland to housing developments. But then - that's taking land out of farming anyway - so why should they get advantageous incentives for that - it defeats the object.
I can assure you farmers think of this most of the time. To suddenly out of the blue to be told everything is changing without any consultation is plainly wrong. Defra didn't even know!!
Whilst there may be several family farms that will be effected surely no one agrees that the many wealthy people like Dyson and Clarkson should be able to avoid paying inheritance tax by buying a farm Clarkson made it clear at the time that this was why he purchased the farm
ROSM
Well-known member
Is there an interest free option to pay IHT for farmland?
also I read a long post by Dan Niedle (major tax journalist) and he addressed how to effectively plan ahead to reduce/remove IHT impacts. This includes gifting , or spousal transfer. Which many other business and families have been doing for years.
This reduces the impacts and transfers them onto those who have bought farmland (and therefore increased values) as a way of avoiding IHT on other assets
In the things that will cause the greatest impact on farmer I think this will be behind the list of milk mark /credit , brexit and supermarket price wars in damage caused
Weststander
Well-known member
Farmland without any hope of housing potential has near all time value of £9k per acre on average,
Due to competing other interests wanting to own it eg the Clarkson's.
Which is no help to genuine farmers looking to carry on. The average length of ownership is 200 years, they're not speculators.
Bold Seagull
strong and stable with me, or...
Until investors and those buying up farms decided to drive up prices of the land by buying to avoid IHT, then simply retaining the farmers as lease holders or however that farm business was to be managed.
We could also see farm land being available to young aspiring farmers not bought up in a farm owning family, so that say a huge farm is up for a hit of IHT, then part of that farm could be sold (not necessarily all of it, just enough to pay the IHT liability) and a young farmer could then become a farm land owner in their own right without needing to inherit and start to run their own farm.
Again, if we want a next generation of young aspiring farmers, then owning their own farms has to be an aspiration, not that farms are always locked into a cycle of inheritance.
- Jul 10, 2003
- 27,791
But those land prices have been driven up by investors and speculators taking advantage of the lack of IHT on Farms. This has been highlighted by farmers for years now that agricultural land is trading at way above it's actual agricultural value. Shirely if this helps stop that, it is a good thing
ROSM
Well-known member
I don't disagree which is where planning ahead, gifting, spousal transfer are all key things that are needed now. That restricts the impact onto the clarksons et al