The Times: Older farmers ‘should be offered cottages’ to retire

[Brisel]

But haven't they paid into there pension

Yes, and their employer has also contributed twice that. No such additional contributions for the self employed farmer.

 

[glasshouse]

2 years is good for nothing, i wouldnt take a farm for just 2 years.

But you have a choice, others do not.

 

[Brisel]

Retirement of farmers is controlled by 3 things money(or lack of), inheritance tax and control.
Money the lack of...
If may well be that a shared ownership scheme that let's say old tenant farmers build a house to retire in is one way to go, but the state should own the % that they pay for, this gives the family the chance to buy it from the government or sell it all pull there assets out.

Control and inheritance tax often go hand in hand.
The active farmer requirement by the tax office lets farmers that want control hide behind it , then you have the ones that just make no provision. (The no plan plan).
They are then trapped into taking an income from the farm and a % of profits until they die. Or the farm is burdened with 40% tax on all assets including the land.

For me changing the inheritance tax rules would help, if they can show the farm is now run by family member the owner can retire if they want at their normal retirement age, they can maintain control of the assets but be allowed to step out of the farms income stream, and pass the farm on at their death using the normal inheritance tax rules. As a retired indervidual they would then be in the same system as any other retired person in the uk until there death. (They can still work but they earn just a wage)

Why change the inheritance tax rules - there's nothing to stop a farmer retiring at any age, only their own view of their immortality/lack of planning. Under the 7 year rule there would be no IHT if they transferred the assets out of their name. Sell it and live off the income. For a tenant this will be harder without the balance sheet of an asset owner.

Perhaps this is down to breaking the myth that then next generation will come and take over, looking after the old boy/girl for the rest of their lives. For a farmer without a successor I have less sympathy - they have chosen to continue as they were. If they haven't chosen to put something aside for retirement I fail to see why we should give them special treatment beyond what is available to everyone else. A cottage in the country is one thing but as care dependency increases this is only a stepping stone into full time care.

Sorry, old folk. I fail to see why the taxpayer should make a special exemption for a former business owner who hasn't planned ahead. This just isn't ploitically acceptable, though it is good to see the subject debated - it's an increasingly pertinent issue, about to be accelerated by the demise of farm subsidies that provided a guaranteed income.

 

[Hilly]

But you have a choice, others do not.

Ofcourse they do, they dont have to farm, there are a million things a selfemployed person can do in the uk. 2 years is a joke, walk away they only get away with offering sh!t tenancy `s because folk take them regardless.

 

[Brisel]

Ofcourse they do, they dont have to farm, there are a million things a selfemployed person can do in the uk. 2 years is a joke, walk away they only get away with offering sh!t tenancy `s because folk take them regardless.

I like this post a lot. If bidders refused to bid for such a short duration then the landowners would have to offer longer ones. The returns from farming just won't generate enough to progress to another bigger unit 2 years later.

 

[Dave645]

Why change the inheritance tax rules - there's nothing to stop a farmer retiring at any age, only their own view of their immortality/lack of planning. Under the 7 year rule there would be no IHT if they transferred the assets out of their name. Sell it and live off the income. For a tenant this will be harder without the balance sheet of an asset owner.

Perhaps this is down to breaking the myth that then next generation will come and take over, looking after the old boy/girl for the rest of their lives. For a farmer without a successor I have less sympathy - they have chosen to continue as they were. If they haven't chosen to put something aside for retirement I fail to see why we should give them special treatment beyond what is available to everyone else. A cottage in the country is one thing but as care dependency increases this is only a stepping stone into full time care.

Sorry, old folk. I fail to see why the taxpayer should make a special exemption for a former business owner who hasn't planned ahead. This just isn't ploitically acceptable, though it is good to see the subject debated - it's an increasingly pertinent issue, about to be accelerated by the demise of farm subsidies that provided a guaranteed income.

The seven year rule is frequently used and is one way, but it's not possible in all cases, and it also risks the farmers living if the family they give it to have a marriage split or if there are multiple brothers or siblings.

Control is the single biggest issue that stops the 7 year rule being used.....

If the farm on the farmers death is to be split to say 3 brothers only one of which is farming if the farmer at 60 or 65 used the seven year rule what happens to the farm, best case the other brother rent back there share to the farming son, worse case is one of them has a marriage break which forces the sale of land or the other brothers just want the cash and wish to sell. That destroys the farm and forces everyone to change.
Now my suggestion removes this risk makes no radical change to inheritance tax rules just the ability of farmers to hold there assets until death but retire as normal. The farmer can retain control without having to keep a stake in the farms income. Selling it and living off the income is only advisable if they are no parties interested in farming or they get slammed with IHT tax On the cash on death but also capital gains tax on the sale at 40% even with allowances of 11k a year and historic values used to reduce capital gains a large portion with still pay 40% tax twice. Which I don't think any family would do.

It's not a change to IHT but to the rule governing active farmer status where it requires farmers to draw income from the farm and profits until death. (And it's no token amount)

As for cottages you may have noted they were not give houses to live in but support like house buyers get now where they can buy only part of a house usually with a housing association. They are not given a house to live in and they pay rent on the other part. I don't think it's needed to supply a house for free or rent free and I doubt if that was ever on the cards. there is a shortage of housing and if houses were built to fill a need it's no bad thing if it also helps solve farming issues as well.

 

[Brisel]

Control. That's the issue why farmers don't like giving up. I see your point about transferring the business assets but reserving the benefit by continuing to live in the house rent free. That's what HMRC have been targeting, especially where the farmhouse value has risen to levels not "character appropriate" (Antrobus, McKenna etc) and can arguably be separated out from the true IHT protected business assets like the land and farm buildings. Business Property Relief is also available even in the unlikely event that IHT is substantially reformed. My knowledge of CGT is more limited but there are ways of mitigating this too through indexing. It is only taxing the gain, not the sale price income.

There's a counter argument that tax exemptions for farm assets are what are artificially inflating farm prices and helping perpetuate this bed blocking problem in the first place.

 

[glasshouse]

Why change the inheritance tax rules - there's nothing to stop a farmer retiring at any age, only their own view of their immortality/lack of planning. Under the 7 year rule there would be no IHT if they transferred the assets out of their name. Sell it and live off the income. For a tenant this will be harder without the balance sheet of an asset owner.

Perhaps this is down to breaking the myth that then next generation will come and take over, looking after the old boy/girl for the rest of their lives. For a farmer without a successor I have less sympathy - they have chosen to continue as they were. If they haven't chosen to put something aside for retirement I fail to see why we should give them special treatment beyond what is available to everyone else. A cottage in the country is one thing but as care dependency increases this is only a stepping stone into full time care.

Sorry, old folk. I fail to see why the taxpayer should make a special exemption for a former business owner who hasn't planned ahead. This just isn't ploitically acceptable, though it is good to see the subject debated - it's an increasingly pertinent issue, about to be accelerated by the demise of farm subsidies that provided a guaranteed income.

Brisel, yet again you get it wrong.
1, A large number of people my age DID put money into pensions but now find they are next to worthless.
2, The old farmers are not asking for anything, its the CLA dinosaurs who want more govt charity.

 

[joe soapy]

Nobody old enough to remember the Farms Amalgamation Scheme back in the 70's?

Payments to small farmers to give up their land if it was absorbed by a larger unit and generous subs to the enlarged holding as I recall.

We applied for that and got turned down

 

[glasshouse]

I like this post a lot. If bidders refused to bid for such a short duration then the landowners would have to offer longer ones. The returns from farming just won't generate enough to progress to another bigger unit 2 years later.

Thats like saying if a person refused to work on a zero hours contract the employer would change his policy. Get real.

 

[Brisel]

Brisel, yet again you get it wrong.
1, A large number of people my age DID put money into pensions but now find they are next to worthless.
2, The old farmers are not asking for anything, its the CLA dinosaurs who want more govt charity.

How about making a constructive suggestion on the issue of retiring farmers?

 

[glasshouse]

How about making a constructive suggestion on the issue of retiring farmers?

How about you being less condescending about others.

 

[Brisel]

Thats like saying if a person refused to work on a zero hours contract the employer would change his policy. Get real.

If the employer couldn't get anyone to sign up then yes, he would. Look up Collective Bargaining. It just needs enough people to do it which never happens. There is always someone who will do it cheaper/shorter/whatever.

 

[Brisel]

How about you being less condescending about others.

How about a posiitve contribution to threads?

 

[glasshouse]

How about a posiitve contribution to threads?

F.uck off

 

[Brisel]

Charming, as ever.

 

[oldoaktree]

Yes, and their employer has also contributed twice that. No such additional contributions for the self employed farmer.

That's a new rule , people who are retiring soon won't benefit from the new rules on pensions

 

[Brisel]

That's a new rule , people who are retiring soon won't benefit from the new rules on pensions

What rules are those please? Not being near retirement age, I didn't pay much attention to them when they were announced.

 

[oldoaktree]

What rules are those please? Not being near retirement age, I didn't pay much attention to them when they were announced.

I'm not your pa so find them yourself if your more interested

 

[Hilly]

Everyone in a bad fettle the day.