[News] Farmers

[beorhthelm]

For land prices to fall a few other things need to happen
- stop anybody being able to ‘roll over’ capital gains (this esp applies to profits from hedge funds and the like)

how do you "roll over" capital gains? asking... well, for me.

 

[abc]

how do you "roll over" capital gains? asking... well, for me.

There are various ‘qualifying assets’ (land is one) in which you can reinvest your gains without paying any tax on them

Business Asset Rollover Relief

Relief from Capital Gains Tax (CGT) if you buy new business assets with the proceeds from selling old ones, check if you're eligible, how to claim

www.gov.uk

 

[WATFORD zero]

There are various ‘qualifying assets’ (land is one) in which you can reinvest your gains without paying any tax on them

Business Asset Rollover Relief

Relief from Capital Gains Tax (CGT) if you buy new business assets with the proceeds from selling old ones, check if you're eligible, how to claim

www.gov.uk

Indeed, when actually you run your business as a business rather than some sort of family inheritance that shouldn't be subject to any of the tax regimes every other business operates under, a whole load of new opportunities open up.

Who'd have thunk it

 

[drew]

You can’t - the ‘gift’ would be a gift with reservation and still included in the estate.

Can you explain a little more as to what the benefit to the farmer is that it is a gift with reservation (I'm no expert as you can probably gather)? If the farmer gifts the business for his son to carry on running and he retains ownership of the farmhouse and just retires would that still be the same?

 

[dazzer6666]

Can you explain a little more as to what the benefit to the farmer is that it is a gift with reservation (I'm no expert as you can probably gather)? If the farmer gifts the business for his son to carry on running and he retains ownership of the farmhouse and just retires would that still be the same?

There isn’t a benefit - there are complications but basically you can’t give your estate away while you’re alive and still have use of it (otherwise everyone would do that)

 

[Herr Tubthumper]

There isn’t a benefit - there are complications but basically you can’t give your estate away while you’re alive and still have use of it (otherwise everyone would do that)

I know I keep going on about limited companies but surely you can hand over the controlling interest of a limited and then engage as an employee? You’d need to ensure/demonstrate you’re not a disguised boss but this is surely possible?

 

[dazzer6666]

I know I keep going on about limited companies but surely you can hand over the controlling interest of a limited and then engage as an employee? You’d need to ensure/demonstrate you’re not a disguised boss but isn’t this possible?

Dunno……..can you look it up somewhere?

 

[Rdodge30]

Indeed, when actually you run your business as a business rather than some sort of family inheritance that shouldn't be subject to any of the tax regimes every other business operates under, a whole load of new opportunities open up.

Who'd have thunk

I know I keep going on about limited companies but surely you can hand over the controlling interest of a limited and then engage as an employee? You’d need to ensure/demonstrate you’re not a disguised boss but this is surely possible?

An owner of a Ltd business is a different legal status to a director.

 

[drew]

There isn’t a benefit - there are complications but basically you can’t give your estate away while you’re alive and still have use of it (otherwise everyone would do that)

I thought that, for example, if you gift your house to your children then you can still live in it if you are paying a commercial rent. In my example, the farmer has effectively 'sold' the whole farm other than the farmhouse to his son. His son works the farm and the original farmer retires and just lives in the farmhouse. He isn't using the farm for any reason. A farm and a farm house are not intrinsically linked, so surely it would be possible.

 

[WATFORD zero]

Dunno……..can you look it up somewhere?

I'm sorry, but of course it's possible. How has every other family business managed to keep going ?

This was a tax loophole only open to farmers. They will now have to do what every other family business (and family with assets do).

It's not even as if this tax loophole has been closed, there's still huge advantages for farmers under IHT, it's just been tightened up a little

 

[dazzer6666]

I'm sorry, but of course it's possible. How has every other family business managed to keep going ?

This was a tax loophole only open to farmers. They will now have to do what every other family business (and family with assets do).

It's not even as if this tax loophole has been closed, there's still huge advantages for farmers under IHT, it's just been tightened up a little

I wasn’t asking

 

[WATFORD zero]

I wasn’t asking

I know I keep going on about limited companies but surely you can hand over the controlling interest of a limited and then engage as an employee? You’d need to ensure/demonstrate you’re not a disguised boss but this is surely possible?

Dunno……..can you look it up somewhere?

Sorry, I thought you were

 

[WATFORD zero]

I've never been one for f***ing over the country to make a few more quid for myself but after all this stuff has been highlighted by the various demonstrations, it's making me wonder.

Even after after all the changes from this current budget, if I use my pension 'pot' to buy my kids a farm that means they'll pay half the IHT they're going to pay if I leave it in my pension 'pot' and will be given 10 years to pay it, compared to me leaving it in my pension and them getting hammered for 40% immediately.

Now obviously, I don't give a flying f*** about farming, but from the people posting on here, it's the 'sensible' thing to do, isn't it

 

[dazzer6666]

I've never been one for f***ing over the country to make a few more quid for myself but after all this stuff has been highlighted by the various demonstrations, it's making me wonder.

Even after after all the changes from this current budget, if I use my pension 'pot' to buy my kids a farm that means they'll pay half the IHT they're going to pay if I leave it in my pension 'pot' and will be given 10 years to pay it, compared to me leaving it in my pension and them getting hammered for 40% immediately.

Now obviously, I don't give a flying f*** about farming, but from the people posting on here, it's the 'sensible' thing to do, isn't it

How do you get at your pension pot now to be able to blow it all on agricultural land that is likely to fall in value anyway without losing a load in tax ?

 

[Goldstone Guy]

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

Here's the link to the interview, sorry if I've missed it and it's already been posted. Definitely worth a listen even if it's more about land ownership in general rather than IHT and farmers.

 

[BadFish]

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.

Sometimes you can tell if a purchaser is using it for tax purposes because they go on record to say so.

 

[dsr-burnley]

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.

It's a matter of national interest. To some, it doesn't matter if not only our food but also our power, our steel, even our armaments, are imported from friendly foreign nations. But to others, they're issues of national security.

This is the whole of Europe's issue, not just the UK's. If we collectively decide to end farm subsidies and import far more from the rest of the world, then we're in dead trouble if the rest of the world decides to keep it for themselves.

 

[Zeberdi]

Average age of a farmer in this country is 59, 33% are over 65. Most work every day of the year, long hours, most well below minimum wage and many on their own.

Just from my experience when I farmed, I made about £25 profit per pig and £18 per lamb.

There's already a crisis in farming in getting young people to work the land. Those that do inherit the family farm, where margins are so low will now be put under further financial pressure. Easy for these townies to say sell some of your land then not understanding that all the land is needed just to scrape a living.

To suddenly change the rules doesn't leave the average farmer of 59 to plan for the farms future.

At a time when we all should be looking for local sourced food this government is putting a lot of these businesses under huge pressure.

It is without doubt a very damaging policy.

When people on the radio or TV bang on about Clarkson are totally missing the point and also not listening to what he says. He, to many is just a millionaire idiot. He does though highlight the very issue faced by many many farmers. The red tape, how hard it is to make a profit. He can afford it many can't. He actually does far more good in educating people than say Countryfile that views the countryside as honey and milk.

Sorry HWT you are very wrong.

This.

The key issue in this debate on IHT is that the productive value of land is less than the real estate value - so farmers will be taxed on a premium value of land when a/ they are not selling it (to release capital) but passing it down to their descendants b/ not earning anywhere close to the actual value of the land. The exemptions are laughable.

A very helpful discussion here hosted by The Farming Forum - I would suggest those living in urban areas with no connection to farming or real understanding of the issues to watch it as well of those working in the farming industry for some creative accounting solutions to the IHT proposal.

 

[PILTDOWN MAN]

I thought that, for example, if you gift your house to your children then you can still live in it if you are paying a commercial rent. In my example, the farmer has effectively 'sold' the whole farm other than the farmhouse to his son. His son works the farm and the original farmer retires and just lives in the farmhouse. He isn't using the farm for any reason. A farm and a farm house are not intrinsically linked, so surely it would be possible.

Restrictions on the house are likely to stop it. You would need planning permission to change the deeds. You will not get it!

 

[zefarelly]

Indeed.

Sainsbury often sells asparagus from Peru. And I thought Paddington was a long way away.

The most sustainable green produce in my neck of the woods, however, is not Macknade's, but Tackle's garden. Specifically my asparagus patch. More than 450 spears this year. At between 50P and a quid a spear, well you can do the maths.

That's something we haven't grown yet . . . . I'm still eating our tomatos, and until the frost yesterday lettuce.