Farm Inheritance Tax

[GarethM]

The reason why farmers are understandably very narked off is the low threshold if they died with many suggesting a more pragmatic 5m or a 10 year holdover if taken out of agriculture.

 

As it stands the total value includes land, buildings, any and all equipment including tractors and farmhouse.

 

With you're average profitable farm being 200+ acres, it would even hit your average small scale farmer below 50 acres that also works outside of the industry to make it work.

 

And before you suggest selling at a peanut rate, that's not possible either.

[5thelement]

1 minute ago, GarethM said:

The reason why farmers are understandably very narked off is the low threshold if they died with many suggesting a more pragmatic 5m or a 10 year holdover if taken out of agriculture.

 

As it stands the total value includes land, buildings, any and all equipment including tractors and farmhouse.

 

With you're average profitable farm being 200+ acres, it would even hit your average small scale farmer below 50 acres that also works outside of the industry to make it work.

 

And before you suggest selling at a peanut rate, that's not possible either.

Below 50 acres is still more than a million in value? 
What if the farm has debt including equipment on the drip, surely this lowers the value also? 

[GarethM]

How much do you think your average farmhouse costs and say a small 60x45 shed and that's before any livestock building ?.

 

Debt, yes machinery is deducted but depending on if you're arable or livestock.

 

A combine is 300k+, a decent new tractor 40-150 excluding machinery.

 

So yes even under 50 will be in the million range, not necessarily loads but enough to make you say why should I bother.

[5thelement]

3 minutes ago, GarethM said:

How much do you think your average farmhouse costs and say a small 60x45 shed and that's before any livestock building ?.

 

Debt, yes machinery is deducted but depending on if you're arable or livestock.

 

A combine is 300k+, a decent new tractor 40-150 excluding machinery.

 

So yes even under 50 will be in the million range, not necessarily loads but enough to make you say why should I bother.

So on 50 acres and single you may pay something, married probably not. 
It all just looks like another sound bite bollocks headline do distract from more pressing issues, the IHT will probably disappear when the next shower come in, there will be a few unfortunate people who inherit in the next 5 years and lose out. 
That’s for the future, In the meantime, farmers can look forward to being poor right now. 
 

[GarethM]

It might be distracting BS, but that isn't going to help anyone right now is it!.

 

A farm is a workplace, imagine going in Monday to find your boss is dead and they want a few hundred grand or home you go unemployed.

 

Be interesting to see what thieves husband says about the matter, he works at DEFRA.

[Muddy42]

Plus the average age of farmer is pretty high about 60, so IHT is a near term worry.  Many havn't done any financial planning or were relying on this relief. Life insurance to pay for the IHT might make sense when you are younger, but premiums get more expensive as you get older.

 

What really annoys me is that often land/asset values have been driven by non-farming forces (forestry, renewables, carbon, second home ownership) all the while farming remains generally unprofitable.  If farmers gift the assets to their children now, they still could be liable for CGT.

[GarethM]

Most farmers pass on to the next generation, it's not as though they financially gain especially in today's farming market.

 

Big numbers and very small profit, oh but you need a 600k combine. Well they do, to get it all in without it spoiling during a tiny time window.

 

To then blame Clarkson is a bit daft, if he sold up and left agriculture that's a different matter and not the same as passing it down.

[openspaceman]

2 hours ago, Muddy42 said:

Many havn't done any financial planning or were relying on this relief. Life insurance to pay for the IHT might make sense when you are younger, but premiums get more expensive as you get older.

An this is the nub, old money has the history of managing inheritance.

 

As @doobin says agricultural property exemption has only been there about 30 years and the result is farm properties have attracted outside investment , This is a trend as the wealthy look to conserve their wealth and get a return, often only in increased capital valuation, as was pointed out earlier farming profits are not a good return for the asset.

 

We saw how the subsidised selling of social housing did not lead to much higher house ownership but did increase the revenue and profits of financial services, those benefiting from this windfall  have meant an increased demand fro property in general, not excluding increased population, and forced rents up.

[Muddy42]

Rather than set up the £1m threshold Id much rather they tightened up the definition of BPR / APR so that speculators like Dyson wasn't able to speculate on the back of being able to claim the relief.  You should only be able to claim it if you are an active farmer that drives a landrover, always waterproof trousers and smells of poo.

[GarethM]

Plus realistically, if IHT only came about 30 years ago.

 

Then they would have bought post WW2 when most farms were effectively government controlled during dig for victory.

 

As if you didn't produce they effectively kicked you off for the duration of the war.