I don't know wheat that says.
And it is probably true that with some good succession planning and an expensive tax advisor, much financial pain can be avoided by most small farms. But that’s not really the point. The Budget doesn’t make sense as anything more than a short-sighted tax grab. Taxation should distinguish between working farmers and tax-dodging chancers. By all means go after the big estates. But going after working farms struggling to survive is cruel. Labour should distinguish between land being sold so their owners can make a profit, and land with an inflated value which often creates little or no wealth advantage to those holding it to farm.
Rebanks is always worth a read. He does take a very broad view in that article though, going far beyond the IHT issue, and somewhat skirts the fact (in two lines) that another big reason farming is less profitable now than it used to be is because farmers overwhelmingly voted for Brexit!
Quote......Labour should distinguish between land being sold so their owners can make a profit, and land with an inflated value which often creates little or no wealth advantage to those holding it to farm. I'm not sure how he proposes the government could do what he asks in the last sentence, other than having thresholds and workarounds, which is what we already have.
......Labour should distinguish between land being sold so their owners can make a profit, and land with an inflated value which often creates little or no wealth advantage to those holding it to farm.
Does anybody have any hard figures that can attest to the high price of land being because demand is inflated by wannabe tax dodgers? I'm sceptical. Surely most of the value is in its alternate use as, for instance, housing developments. And what was it that Mark Twain said? "Buy land, they're not making it any more."One of the reasons that farming is so unprofitable is that we have got the price of food screwed down so tight. In 1957 UK households spent 33% of their income on food, down to 16% in 2017 (https://blog.ons.gov.uk/2018/01/18/celebrating-60-years-of-family-spending/). I'm not saying I want to change that since there are many households already struggling to afford enough food, but it's certainly one reason that profits are so low. Wellsy, that's a really narrow townie view. Imagine saying something like "if I was sat on a good university degree I think I'd be an investment banker rather than a teacher/nurse/care worker and I don't have much sympathy for those who do those jobs and struggle to get by". Go and read The Shepherd's Life for starters. Some people have it in their blood and thank God they do because we do need some people to do it and I certainly don't want to volunteer. I think the change in policy is broadly right because it is a tax dodge that should be closed down, and I think farmers will generally be able to do some tax planning to get around it. This was confirmed a few weeks ago when I spoke to an accountant who worked for lots of the local farmers (I was out on the doors again: https://www.facebook.com/share/15Djs1ot6W/). He told me he agreed with the thrust of the policy, and agreed that most farmers would find a way around it, but thought the threshold needed to be 500k or so higher to make sure that just about all legitimate family farmers were protected.So I'm not concern-free. If farm land gets sold off then it's likely to be bought up by the bigger farms and agribusinesses, pushing out the smaller players. It also disincentives investment. And there will be some people, even if it's hopefully a small number, who are legitimate family farmers, who want to carry on working the unique land that they know and understand through generations of hard-won knowledge, who are forced out because their tax planning fails (parents die within 7 years of passing on the land etc) and can't afford the IHT bill. Changes to policy like this will inevitably have some negative fallout and we can't pretend otherwise.
Quote from: spidermonkey09 on Yesterday at 09:26:52 amRebanks is always worth a read. He does take a very broad view in that article though, going far beyond the IHT issue, and somewhat skirts the fact (in two lines) that another big reason farming is less profitable now than it used to be is because farmers overwhelmingly voted for Brexit!This is oft quoted but.... did they? The last info I saw on this* was that 53% of farmers voted for Brexit (so pretty much in line with the general population) and what they were voting for was more protectionism (that was promised but the opposite was delivered) and matched but better allocated subsidies (the CAP is now pretty broken, the subsidies were promised but again poorly delivered) which I can understand why they voted for that, even if I think they were naive in doing so.*frustratingly can't find the source now.
I stand corrected, the source would appear to be this Times chart? Does appear they broadly voted in line with the rest of the population. https://www.reddit.com/r/RuralUK/comments/1guvo2b/how_farmers_voted_for_brexit_versus_the_wider_uk/
A farmers point of view here:https://unherd.com/2024/11/a-farmers-revolt-is-coming/
It takes many farmers half their working lives to sort out their parent’s succession, pay out their siblings, and get their business breaking even.
Quote from: Will Hunt on Yesterday at 10:21:04 amQuote......Labour should distinguish between land being sold so their owners can make a profit, and land with an inflated value which often creates little or no wealth advantage to those holding it to farm. I'm not sure how he proposes the government could do what he asks in the last sentence, other than having thresholds and workarounds, which is what we already have.The way to rationalise land valuations is to ensure they are in line with the earnings provided by farming that land. IHT is a great way to do that. If the farm can't rustle up 20% of the value of the land (with the >£1M allowance) over the course of ten years, then the land valuation must have been severely distorted. Land coming onto market as forced sales to pay IHT in the "nuclear option" if it turns out valuations have been totally out-of-whack.
We're talking about people who literally own millions of pounds worth of capital already. They can sell, people sell land and farming equipment all the time. It sounds like financially they would be much better off doing so
Quote from: chriss on November 19, 2024, 09:53:21 pmOne kinda valid point I heard was if it's worth so much money, surely you'd sell up and live as a millionaire? But I get it's a family thing, in your blood etc which I understand. My wife works in the NHS & she's certainly not in it for the money or week night clap's.Would your wife still work in the NHS if she had a couple of million in the bank? I wouldn't. (I'm reasonably caring and I left the NHS for slightly less money and guaranteed lunch breaks.)I guess I don't understand the drive that some farmers feel.
One kinda valid point I heard was if it's worth so much money, surely you'd sell up and live as a millionaire? But I get it's a family thing, in your blood etc which I understand. My wife works in the NHS & she's certainly not in it for the money or week night clap's.
Edit. I think small farms will be fine as will large ones as they can afford this cost, but the middle sized farms will be very affected.
Yes, but they can sell the land. I'm not sure why I should be hugely sympathetic that if they don't they will make very little money?If someone inherits a farm of three million then yes they might have to sell it to pay the 400k tax bill. Very sad, but the 2.6 million left over will console them quite effectively I would imagine I'm not excited by the idea of small landowners being forced to sell, but also at the same time, anyone who is forced to sell just became a millionaire and if it goes to a large farm that can use the land more efficiently then that's fine by me.Like this basically an appeal to my desire to keep the small holding farmer around right? I'm not sure why I am supposed to want that? I don't want every Tescos to become an independent family business either, or for every train line to be run by a different company.
As I understand it, its quite common for farmers to sell off bits of land, or property on the land to cover a shortfall or to fund a new investment...
Stone, I don't know how you can disentangle the land's value as agricultural land from its value under some other more lucrative purpose. Land may not have much monetary value as agricultural land, but we do need agriculture. Has everybody forgotten how important food is?
If you have a farm that’s barely scraping by anyway, having to reduce its size every time someone dies isn’t going to help that!