Why buy acres??

Punch · Dec 31, 2023

Enry said:
Totally, and often by choice, hence minimal sympathy from the general public! i.e. If I choose to take on 80k a year interest payments to build wealth for future generations, but have no cash for a nice car or holiday, that state of play is not only self inflicted but was by my own free will. I was owed money by someone who had paid a lot of money for land to buy and let...had to point out that it was not the place of me or his suppliers to fund his expansion and future wealth (or otherwise)

Those £80k interest payments are tax deductible. Makes it cheaper money, depending on profitability. Still need to find the repayments on top though!

serf · Dec 31, 2023

Greedy said:
There were and are some unusual cases that weren’t fully exempt. Might depend if a joint owner passed away before 1984 or sometimes on tenancy issues.

Hence the deceased was " farming it " them selves , on paper at least .

FonterraFarmer · Dec 31, 2023

Hilly said:
How much should agg subs be capped at ?

Zero and pass all relevant/required costs onto the retailers so they can pass them onto the customer/consumer.
Cull out the parasitic bureaucracy makes it a win for the farmer and the consumer!!!

Hilly · Dec 31, 2023

FonterraFarmer said:
Zero and pass all relevant/required costs onto the retailers so they can pass them onto the customer/consumer.
Cull out the parasitic bureaucracy makes it a win for the farmer and the consumer!!!

Correct answer !

Punch · Dec 31, 2023

serf said:
Hence the deceased was " farming it " them selves , on paper at least .

Agree, but there are some unusual cases where land was not wholly classed as agricultural and development potential was appraised. Also, derelict buildings were not classed as agricultural. End of 1980‘s & early 90’s was the start of “barn conversion“ craze, adding value to those buildings. You need a bit of luck in life and maybe more in death!
I wouldn’t want to speculate on another’s situation but I’ve heard of these types of effects to what were thought agricultural “estates” for probate.

midlandslad · Dec 31, 2023

Greedy said:
Those £80k interest payments are tax deductible. Makes it cheaper money, depending on profitability. Still need to find the repayments on top though!

And the repayments are after tax.

Assuming you are paying 40% income tax then for every £60k repayment you need £100k profit

Punch · Dec 31, 2023

midlandslad said:
And the repayments are after tax.

Assuming you are paying 40% income tax then for every £60k repayment you need £100k profit

Could be more depending on how many partners involved or business set up but yes. Lot to ask from existing business just on buying just a bit more.

FonterraFarmer · Dec 31, 2023

Hilly said:
Correct answer !

You and Woofer want the 12 page travel challenge???

serf · Dec 31, 2023

Greedy said:
Agree, but there are some unusual cases where land was not wholly classed as agricultural and development potential was appraised. Also, derelict buildings were not classed as agricultural. End of 1980‘s & early 90’s was the start of “barn conversion“ craze, adding value to those buildings. You need a bit of luck in life and maybe more in death!
I wouldn’t want to speculate on another’s situation but I’ve heard of these types of effects to what were thought agricultural “estates” for probate.

Yes heard of a case where I think hope value on the potential of gaining PP for residential had been factored in and this was before 2013 rule change and didn't get APR on the traditional building and had to pay up !

All I can say is make them look as agricultural as poss on D day and fill them full of agri stuff and have historic pictures of such as you go through the years as backup ...

But at the end of the day if the district valuer says they won't attract APR because of the Residential potential tell them right ok give us PP for Resi on the lot then if you want to tax us as such ...

Enry · Dec 31, 2023

Greedy said:
Those £80k interest payments are tax deductible. Makes it cheaper money, depending on profitability. Still need to find the repayments on top though!

ok so 16k tax relief, IF you are in a position where other purchases or investments don't bring tax under control. The 80k will be there in profitable and not so profitable years

Enry · Dec 31, 2023

Greedy said:
Wished we had been more ambitious, but that’s hindsight.
£60/t wheat caused some pencil sharpening and remembering the interest rates 30 odd years ago. Nearly 1/5 the purchase price per year gone in interest.

The early 90's onwards have been good, and a generation of farmers have never seen high interest rates

Hilly · Dec 31, 2023

FonterraFarmer said:
You and Woofer want the 12 page travel challenge???

??

neilo · Dec 31, 2023

Enry said:
The early 90's onwards have been good, and a generation of farmers have never seen high interest rates

As a partner in a business doing dairy, sheep and arable, I would suggest that the mid-80’s through to 2000 were generally pretty good. There were certainly good times and bad (BSE!), but costs were generally such that you could buy land through farming it, with hard work.
That isn’t the case today, even with lower interest rates.

Enry · Dec 31, 2023

neilo said:
As a partner in a business doing dairy, sheep and arable, I would suggest that the mid-80’s through to 2000 were generally pretty good. There were certainly good times and bad (BSE!), but costs were generally such that you could buy land through farming it, with hard work.
That isn’t the case today, even with lower interest rates.

Late 80's interest rates were a killer with heavy borrowings, but otherwise a good time

Exfarmer · Dec 31, 2023

Enry said:
Late 80's interest rates were a killer with heavy borrowings, but otherwise a good time

Heavy borrowings, I borrowed over 50% of value in that era On 600 acres. Love to see how anyone with a similar acreage borrowing 50% of that acreage value would fare today

neilo · Dec 31, 2023

Enry said:
Late 80's interest rates were a killer with heavy borrowings, but otherwise a good time

They were a killer, but profitability was such that you could farm your way through it with hard work.
Now, it doesn’t matter how hard you work, you won’t pay for land from farming it.

Hilly · Dec 31, 2023

Alot of farm sales in 1980s 1990s

Exfarmer · Dec 31, 2023

Hilly said:
Alot of farm sales in 1980s 1990s

I bet i checked out a 100!

neilo · Dec 31, 2023

Hilly said:
Alot of farm sales in 1980s 1990s

Down in the Cotswolds, I don’t remember many farms packing up, other than estates getting out of sheep, sacking the shepherds, renting their houses out and ploughing up every inch they could.

Coincidentally, about the time they were all getting national land agents in to appraise their farming enterprises, famous for only looking at short term income and looking after their contract farming buddies.

Exfarmer · Dec 31, 2023

neilo said:
Down in the Cotswolds, I don’t remember many farms packing up, other than estates getting out of sheep, sacking the shepherds, renting their houses out and ploughing up every inch they could.
Coincidentally, about the time they were all getting national land agents in to appraise their farming enterprises, famous for only looking at short term income and looking after their contract farming buddies.

Looked at many farms that way as that was where i really wanted to be, for ancestral connections , in some ways would have been good but really think i would not mix with the Soho crowd

Why buy acres??

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Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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