[News] Farmers

Diablo · Nov 20, 2024

beorhthelm said:
that's a mix of fibs (rise not that much) and land being seen as investment beating interest rates return or inflation.

When Queen Elizabeth II acceded to the throne in 1952 at the age of 25 farmland values stood at £78 per acre, equivalent to £1,700 per acre in real terms . Now, 70 years on, the average value in England is £7,800 per acre.
If land values had only risen to £1700 acre genuine Farmers would be better off. Return on capital quoted at 2% with land at £10k acre would be 12% enabling farmers to expand and buy land. I believe the only Farmers who can afford to buy land are the ones who have sold land for housing.

drew · Nov 20, 2024

I don't think farmers of any size should be exempt but perhaps the policy could be tweaked a bit so that for farms that are owned by a family and that are passed down to a family member to continue food production (and food production should be the main purpose of the farm, for example, a livery yard can't have a vegetable patch and claim exemption) then the IHT should be deferred until such time that food production ceases!

beorhthelm · Nov 20, 2024

Brian Fantana said:
...
There needs to be a split between farm land that is genuinely being used for the correct purpose versus that which has been purchase by the super-rich and taken out of production, as it were.
...

there's the root of the issue, farm land isn't taken out of production when the rich buy it. whether it's owned by Kaleb or Clarkson, it's still farmed. there's presumably no way to formally tell if land purchase was intended to be tax avoidance, some investment, a desire to get to with nature or start a popular TV program. could check if there's something growing, but as hay or sheep grazing counts, that's a low bar.

Machiavelli · Nov 20, 2024

Bozza said:
When I entered the thread, you weren't talking about the specifc IHT policy and neither was I in my responses to you

You seemed to be implying that the farmers weren't really protesting about IHT changes, but it was more a proxy Tory v Labour / right v left protest.

I opened this thread and saw you say:

"From reading this thread it seems farmers have been working every hour god sends for little reward and a pittance in pay all the while supermarkets drive their farmer’s prices down further. They have done this for years/decades with little to no complaint when they certainly had cause to. The minute a Labour government wants to close an unfair IHT tax loop-hole they protest.

Make of this what what you will."

In response, I posted a list of farmer complaints, going back decades, about supermarkets driving down the prices they pay farmers.

You countered with:

"I am aware of previous farmers gripes and complaints, but I am not aware of a protest of this scale before, with them driving to Downing Street and flooding the media. Even the first two links you posted demonstrate this with “take to Tesco to task” and “complain over supermarkets” etc being as radical as it’s got. Maybe I have missed it but the current protests seems another level entirely. Why now?"

In response, I posted two videos documenting large-scale farmer protests in central London/Downing Street.

You'll note two things:

1. I'm not disputing that this may be a right v left proxy protest. I really have no idea, although when opportunistic grifters like Farage and Badenoch get involved, at the very least it diminishes the validity of the protest.

2. I'm neither siding with the farmers nor the government on the broader policy point.

If I had strong feelings on this policy, my first post on this thread would have happened before yesterday afternoon, and it would have actually been on the main point, instead of merely highlighting to you that you've missed prior farmer complaints and protests.

So, when I said:

"Your posts seem to indicate you've made your mind up on that, regardless od what anyone else may say."

...I was saying: "Your posts seem to indicate you've made your mind up that this is a proxy right v left protest...." I was not saying you've made up your mind on the farmer IHT policy, although you have since confirmed you have.

I'm genuinely dumbfounded you said this:

"From the information I have read yes, I have made my mind up….the same as you seem to have."

...because I've said little-to-nothing on the farmer IHT policy change.

This is the only thing I have said:

"As with the Winter Fuel Payments, it feels like a sound policy that has been poorly or lazily implemented such that worthy cases are caught up in it adversely.

I know next to nothing about farming, and knew literally nothing about farm inheritance before Reeves' party piece a few weeks back. I had no idea that farmers had an Inheritance Tax waiver.

But since then, I've listened and read to try and understand the reasoning behind the angst, and there does seem to be some merit. And, as often is the case with these things, the little guy will be impacted the most. The big guy will have access to lawyers and accountants who will help them minimise how they get hit."

I know little about Inheritance Tax because, unless something completely unexpected happens to me in my twilight years, it's not going to be a concern for me nor my children.

I knew nothing about farmers previously escaping IHT because, why, well would I? I suspect most of the non-farming British public had no idea either.

As above, the policy seems to be broadly sound, and who wouldn't support the targeting of the ultra-wealthy who buy up farmland and/or farms in order to escape paying tax? That's exactly what we should be doing. Do more of this kind of thing, please.

But from all the reading and listening I've done on this subject, I can understand the concern of the smaller farmers who, whilst technically asset-rich - far more so than most people - are also cash-poor, and even though their new IHT burden is preferential in terms of rate and payment terms, it could be very difficult to pay.

Now, I hope all the talk of trusts and limited companies are workable - I have no idea - it's way beyond my paygrade. But if it were that easy...

1. Why the angst in the farming community?
2. If all the farmers took these legitimiate IHT escape routes, this policy would then raise precisely £0. And there's a £22bn blachole that needs filling apparently.

RE Q1, it's because they've been mobilised by organs (and I use that word in multiple senses) that have an interest in mobilising constituencies against anything that entails the redistribution of assets.

This really is a nothing to see here issue. The OBR and IFS are quite clear about how many will be affected. What this issue boils down to is that lots of people claim that farmers should be immune from (certain elements of) taxation and, more importantly, from tax planning. If they did the latter, then the 500pa figure raised by the OBR, IFS and government would be accurate.

I really don't get why so many are hostile to IHT and want the asset-ultrarich to have so many loopholes. All of this also presupposes that just because you were born into a farming family, you will want to be a farmer -- which is a rather restrictive PoV. If the effect of this is to break up certain large farms, it'll open up the opportunity for those that want to pursue the farming way of life to do so.

Bodian · Nov 20, 2024

Springal said:
I saw a stat that land valuations for agricultural land was up nearly 300% since 2010 or something - why such a sharp rise in valuations ?

A generation of growth in agricultural land values | Rural | Carter Jonas

How have land values performed over the last 30 years? Our research team explores the relationship between agricultural land values and inflation.

www.carterjonas.co.uk

Useful reading.

Herr Tubthumper · Nov 20, 2024

Bozza said:
When I entered the thread, you weren't talking about the specifc IHT policy and neither was I in my responses to you

You seemed to be implying that the farmers weren't really protesting about IHT changes, but it was more a proxy Tory v Labour / right v left protest.

I opened this thread and saw you say:

"From reading this thread it seems farmers have been working every hour god sends for little reward and a pittance in pay all the while supermarkets drive their farmer’s prices down further. They have done this for years/decades with little to no complaint when they certainly had cause to. The minute a Labour government wants to close an unfair IHT tax loop-hole they protest.

Make of this what what you will."

In response, I posted a list of farmer complaints, going back decades, about supermarkets driving down the prices they pay farmers.

You countered with:

"I am aware of previous farmers gripes and complaints, but I am not aware of a protest of this scale before, with them driving to Downing Street and flooding the media. Even the first two links you posted demonstrate this with “take to Tesco to task” and “complain over supermarkets” etc being as radical as it’s got. Maybe I have missed it but the current protests seems another level entirely. Why now?"

In response, I posted two videos documenting large-scale farmer protests in central London/Downing Street.

You'll note two things:

1. I'm not disputing that this may be a right v left proxy protest. I really have no idea, although when opportunistic grifters like Farage and Badenoch get involved, at the very least it diminishes the validity of the protest.

2. I'm neither siding with the farmers nor the government on the broader policy point.

If I had strong feelings on this policy, my first post on this thread would have happened before yesterday afternoon, and it would have actually been on the main point, instead of merely highlighting to you that you've missed prior farmer complaints and protests.

So, when I said:

"Your posts seem to indicate you've made your mind up on that, regardless od what anyone else may say."

...I was saying: "Your posts seem to indicate you've made your mind up that this is a proxy right v left protest...." I was not saying you've made up your mind on the farmer IHT policy, although you have since confirmed you have.

I'm genuinely dumbfounded you said this:

"From the information I have read yes, I have made my mind up….the same as you seem to have."

...because I've said little-to-nothing on the farmer IHT policy change.

This is the only thing I have said:

"As with the Winter Fuel Payments, it feels like a sound policy that has been poorly or lazily implemented such that worthy cases are caught up in it adversely.

I know next to nothing about farming, and knew literally nothing about farm inheritance before Reeves' party piece a few weeks back. I had no idea that farmers had an Inheritance Tax waiver.

But since then, I've listened and read to try and understand the reasoning behind the angst, and there does seem to be some merit. And, as often is the case with these things, the little guy will be impacted the most. The big guy will have access to lawyers and accountants who will help them minimise how they get hit."

I know little about Inheritance Tax because, unless something completely unexpected happens to me in my twilight years, it's not going to be a concern for me nor my children.

I knew nothing about farmers previously escaping IHT because, why, well would I? I suspect most of the non-farming British public had no idea either.

As above, the policy seems to be broadly sound, and who wouldn't support the targeting of the ultra-wealthy who buy up farmland and/or farms in order to escape paying tax? That's exactly what we should be doing. Do more of this kind of thing, please.

But from all the reading and listening I've done on this subject, I can understand the concern of the smaller farmers who, whilst technically asset-rich - far more so than most people - are also cash-poor, and even though their new IHT burden is preferential in terms of rate and payment terms, it could be very difficult to pay.

Now, I hope all the talk of trusts and limited companies are workable - I have no idea - it's way beyond my paygrade. But if it were that easy...

1. Why the angst in the farming community?
2. If all the farmers took these legitimiate IHT escape routes, this policy would then raise precisely £0. And there's a £22bn blachole that needs filling apparently.

Crikey. I will have to come back to this later I'm afraid.

chip · Nov 20, 2024

drew said:
I don't think farmers of any size should be exempt but perhaps the policy could be tweaked a bit so that for farms that are owned by a family and that are passed down to a family member to continue food production (and food production should be the main purpose of the farm, for example, a livery yard can't have a vegetable patch and claim exemption) then the IHT should be deferred until such time that food production ceases!

I sort of agree with this. However, we have had 20+ years of encouraging diversification. Most of the farms around me run shoots, have livery yards (often run by someone else), offer rental accomodation and some have other light commercial activities. We should remember than small farms shape our landscape and biodiversity, it's about more than just money. For example, the water meadows at West Dean prevent flooding around here, what value do you put on that 100+ acres? There is an environmental benefit to good farming which has value to us all. These changes will ultimately be to our detriment.

This will, of course, have a greater impact in the South where land prices are higher. There's a lot of difference between a hill farm in Cumbria and a mixed farm in Sussex. If we want to be equitable we need to account for regional variation.

Bozza · Nov 20, 2024

Herr Tubthumper said:
Crikey. I will have to come back to this later I'm afraid.

TL'DR...

1. I was merely highlighting where you were wrong on lack of prior farmer complaints and protesting in central London.

2. Your apparent assumption that I back the farmers stance over the government is horrendously wide of the mark.

Super Steve Earle · Nov 20, 2024

Machiavelli said:
RE Q1, it's because they've been mobilised by organs (and I use that word in multiple senses) that have an interest in mobilising constituencies against anything that entails the redistribution of assets.

This really is a nothing to see here issue. The OBR and IFS are quite clear about how many will be affected. What this issue boils down to is that lots of people claim that farmers should be immune from (certain elements of) taxation and, more importantly, from tax planning. If they did the latter, then the 500pa figure raised by the OBR, IFS and government would be accurate.

I really don't get why so many are hostile to IHT and want the asset-ultrarich to have so many loopholes. All of this also presupposes that just because you were born into a farming family, you will want to be a farmer -- which is a rather restrictive PoV. If the effect of this is to break up certain large farms, it'll open up the opportunity for those that want to pursue the farming way of life to do so.

Oh well. If only >500 family farms a year are put out of business and taken out of the food chain by this policy being the final straw, I can see why you aren't bothered. Clearly a non issue.

PILTDOWN MAN · Nov 20, 2024

I'll give it one more go.

Firstly Brexit.

Farmers were no different to the rest of us in voting patterns.

They were however targeted directly. The Common Agricultural Policy was costing the government far more than what our farmers were getting out of it. The leavers promised the farmers they'd be better off, they aren't.

The CAB was based on the low producing farms (the French peasant farmer) and not the advanced farms. The idea was to bring these low producing farms up to standard. In fact what was happening was they were holding back the advanced farms. Some of us remember the butter mountain or the milk lake. CAB ended up paying farms not to produce food. How stupid is that?

When people say our farmers can't feed us and we have to import, there are various reasons for it. We can but our costs are higher. These higher costs are sometimes red tape but also producing the actual food. Everyone is now expects to have supermarket shelves full of produce that are out of our season or our climate doesn't suit. Farming has attempted to produce these foods in our country but the cost is higher ie growing under glass in heated greenhouses.

Size of farms

Yes there's loads of small farms. Many may attempt to produce but few actually are viable unless they're niche (growing watercress for example). To satisfy the needs of the country we need large scale farming.

When many small farms, with a house, are sold they are being bought by people who have no intention of farming but having a horse for their daughter. By law many of these properties (land) are not allowed to have just horses but need to be agricultural. This has been flaunted however these properties will still listed as a farm. Then there are the houses sold with agricultural tie, these too often have people buying them with no intention of producing anything. Again listed as a farm.

The medium sized farms, normally family owned, are our backbone producers, they need protecting. Farming is a f***ing hard job often with little reward and has struggled for years. The average age of a farmer is 59, 33% over the retirement age. Why is this? It's been a huge struggle to get young blood to work the land. Surely being able to pass the family farm down the line without penalty safeguards these farms.

When we all know that the climate crisis needs us all to re-think the way we live our lives we must look at where we get our food from. We need to accept seasonal foods, grown locally at a fair price to all. Cheap imports are not good.

IHT

People keep using Clarkson to tar all farmers with. This just isn't the case. I'm in full agreement these type of landowner should not be able to avoid IHT and indeed it should be 40%. To administer IHT would not be hard to do if it was on a simple scheme.

Why not have a simple system.

Land/farm bought,
last 15 years 40%
15 to 20 years 30%
20 to 25 years 20%
25 and over 0%

That will take the vast majority of historic family farms out of IHT. The caveat would be should any historic farm sold after being transferred down then 20% would become payable. (make this time limited)

This has obviously caused a great deal of anger but in truth exactly how much is going to be raised by this policy? This government has certainly taken a sledgehammer to crack a nut.

PILTDOWN MAN · Nov 20, 2024

beorhthelm said:
there's the root of the issue, farm land isn't taken out of production when the rich buy it. whether it's owned by Kaleb or Clarkson, it's still farmed. there's presumably no way to formally tell if land purchase was intended to be tax avoidance, some investment, a desire to get to with nature or start a popular TV program. could check if there's something growing, but as hay or sheep grazing counts, that's a low bar.

A lot of land bought by the super rich is taken out of production. I live on a country estate bought 25 years ago, over 3000 acres. Hasn’t seen any farming activity in all those years.

Machiavelli · Nov 20, 2024

Super Steve Earle said:
Oh well. If only >500 family farms a year are put out of business and taken out of the food chain by this policy being the final straw, I can see why you aren't bothered. Clearly a non issue.

It would be an issue if they were put out of business as a result of this, but all it will mean is:
-- asset-rich investors in farmland will no longer get their tax loophole
-- the estates of those genuine farms that are caught by this IHT change will have to sell a proportion of that estate in order to fund the liability. They'll still have huge farms, and it'll encourage wannabe farmers to buy up that land and start farming on it (something they can't do currently).

You can provide a serious response to this if you want.

rippleman · Nov 20, 2024

Are farmers still being paid NOT to farm their farmland? Ten years ago I had a client being paid £12K per annum NOT to farm one of his fields.

And do we really need businesses that rely on subsidies to survive? If any other kind of business is not commercially viable it goes bust and closes down or is bought out by a bigger player. I don't understand why farms should be treated differently from every other kind of business.

Super Steve Earle · Nov 20, 2024

Machiavelli said:
It would be an issue if they were put out of business as a result of this, but all it will mean is:
-- asset-rich investors in farmland will no longer get their tax loophole
-- the estates of those genuine farms that are caught by this IHT change will have to sell a proportion of that estate in order to fund the liability. They'll still have huge farms, and it'll encourage wannabe farmers to buy up that land and start farming on it (something they can't do currently).

You can provide a serious response to this if you want.

The serious response is that I've watched a lot, read a lot and used to bank some of the farming community, welly boots, mud and all, ( a few years ago granted). Farming was and probably still is a specialist sector. I don't really want to debate the matter but, they are in my opinion, a special case and I cannot see how it will help the viability of any farm in the face of increasing costs and decreasing returns, to sell off farmland, or add a large IHT bill to descendants to carry on exactly the same business, but there are indeed two sides to the argument and the strands on either side can get quite complex.

Thunder Bolt · Nov 20, 2024

Why did Margaret Thatcher exempt the farmers in 1984, and prior to that, what was the criteria for IHT for farms? Was is 40% like the rest?

Machiavelli · Nov 20, 2024

Super Steve Earle said:
The serious response is that I've watched a lot, read a lot and used to bank some of the farming community, welly boots, mud and all, ( a few years ago granted). Farming was and probably still is a specialist sector. I don't really want to debate the matter but, they are in my opinion, a special case and I cannot see how it will help the viability of any farm in the face of increasing costs and decreasing returns, to sell off farmland, or add a large IHT bill to descendants to carry on exactly the same business, but there are indeed two sides to the argument and the strands on either side can get quite complex.

That is a serious response, and agree very much with your final point. I'll just add that this whole issue has been complexified by non-farmers buying up agricultural land (and, for the most part, not using it for farming) to take advantage of the tax loophole. I'm glad that this change has come in to address this development.
If you accept that, then the key point is how to capture those using the loophole without capturing too many farmers, especially the small and mid-sized ones. I'm not skilled enough to ascertain precisely if this IHT change will exempt such farmers, while capturing large estate farmers and the tax avoiders. I do think that those at the OBR and Treasury would have thought about this quite carefully, and that this is the optimal way to do this. I'm not really bothered if, in capturing the tax avoiders, certain very large estates are caught up in it, because: (i) they can afford it (and why should they be exempt from IHT, unlike you or I?); and (ii) any subsequent sale of the land is not going to take it out of agriculture, it'll just lead to smaller farmers buying it up and farming it.

Happy for you to diverge from this but, given I've already declared this to be a non-issue, I might not respond but might refer you to the recent post by @Happy Exile in one of the Labour party threads.

drew · Nov 20, 2024

Just listening to James O'Brien and he has a guest who has written a book called the Lie of the Land. 1% of the population own 50% of the land in the uk! An area the size of greater London is set aside for grouse shooting!

Top 50 UK landowners

Brian Fantana · Nov 20, 2024

Thunder Bolt said:
Why did Margaret Thatcher exempt the farmers in 1984, and prior to that, what was the criteria for IHT for farms? Was is 40% like the rest?

MT's government exempted farmers in 1984 for many of the reasons that are being discussed in the current debate, namely:

- Preventing the break-up of family farms
- Encouraging investment
- Protecting the rural economy in general, and the wider jobs associated beyond JUST farming.

The protection was specifically put in place on the condition that the land was being used for agricultural purposes.

In terms of the tax position pre-1984, IHT didn't exist per se at that point. It was called Capital Transfer Tax, I'm pretty sure. It had a certain amount of relief built in, depending on a variety of factors around farm size, exact usage and ownership structure. I'm not certain on the exact impact on this, i.e. how many farmers were forced to sell due to this tax etc etc, but it seems a fairly similar arrangement to what we're now heading back to.

cunning fergus · Nov 20, 2024

rippleman said:
Are farmers still being paid NOT to farm their farmland? Ten years ago I had a client being paid £12K per annum NOT to farm one of his fields.

And do we really need businesses that rely on subsidies to survive? If any other kind of business is not commercially viable it goes bust and closes down or is bought out by a bigger player. I don't understand why farms should be treated differently from every other kind of business.

Is the right answer; and the EU is the very worst organisation for subsidies with the CAP being circa 50% of its budget.

Without turning this into a Brexit debate the CAP is not justifiable on any level and by leaving the UK had an opportunity to reform its farming sector.

It would have been painful but then the precedent for non subsidised farming has been set in New Zealand in the 80s, it’s achievable if you bring the farmers onside as opposed to dry arse f@cking them with tax policies introduced on the fly.

That’s British politics these days.

Doc Lynam · Nov 20, 2024

clapham_gull said:
It does appear not as best thought out as it could have been, but this is this Government at the moment. For balance I'd like them to go after the supermarkets as well.

To the above point, I'm not sure how Clarkson is helping, especially when his previous honest comments on why he bought his farm are included in much of the coverage.

A problem with Clarkson is his ego.

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