Treasury eyeing up IHT reliefs in upcoming budget?

[Feldspar]

Clickbait or a case of no smoke without fire?

Inheritance tax 'loophole' could be closed in Rishi Sunak's Budget

At present people can invest in agricultural land and their children do not have to pay inheritance tax. However, some critics say this is simply a way for the very wealthy to avoid tax.

www.dailymail.co.uk

Chancellor Rishi Sunak to claw back £1bn from well-off inheritance tax dodgers

RISHI Sunak is looking at clawing back nearly £1 billion from the well-off who dodge inheritance tax to raise cash for Boris Johnson’s infrastructure splurge in the Budget. The Sun understands the …

www.thesun.co.uk

 

[midlandslad]

They wouldn’t would they?

Would a bit of tinkering really be that bad?

 

[D14]

Clickbait or a case of no smoke without fire?

Inheritance tax 'loophole' could be closed in Rishi Sunak's Budget

At present people can invest in agricultural land and their children do not have to pay inheritance tax. However, some critics say this is simply a way for the very wealthy to avoid tax.

www.dailymail.co.uk

Chancellor Rishi Sunak to claw back £1bn from well-off inheritance tax dodgers

RISHI Sunak is looking at clawing back nearly £1 billion from the well-off who dodge inheritance tax to raise cash for Boris Johnson’s infrastructure splurge in the Budget. The Sun understands the …

www.thesun.co.uk

It was always going to happen wasn't it! More likely under Labour so I assumed we were safe for about 10 years as I can't see Labour being anywhere close in 5 years time. I'm surprised the Conservatives are looking at it to be honest as it'll direct affect a lot of their members. It could be a warning sign so everybody can get their houses in order though I guess.

 

[DrWazzock]

Well maybe some changes are necessary but they need to aware that “normal” farming isn’t awash with money to pay these taxes and quite a few business could be forced to sell up to pay what’s owed. That could also depress land prices and the spiral continues.

I have looked at a lot of alternative enterprises in this country and by and large the biggest brake on the system is taxation of one sort or another. Even lowly caravan storage makes one susceptible to business rates making the idea largely unviable financially. The same has happened to the high street crippled by rates. I sometimes wonder if anybody in power really understands how business works. We just don’t have an unlimited pot to draw on and it gets to the point where staying in bed is the most pragmatic option.

 

[D14]

Well maybe some changes are necessary but they need to aware that “normal” farming isn’t awash with money to pay these taxes and quite a few business could be forced to sell up to pay what’s owed. That could also depress land prices and the spiral continues.

I have looked at a lot of alternative enterprises in this country and by and large the biggest brake on the system is taxation of one sort or another. Even lowly caravan storage makes one susceptible to business rates making the idea largely unviable financially. The same has happened to the high street crippled by rates. I sometimes wonder if anybody in power really understands how business works. We just don’t have an unlimited pot to draw on and it gets to the point where staying in bed is the most pragmatic option.

Agreed but just imagine what would be happening now if Corbyn got in! Business in general would be finished in this country.

 

[Steevo]

I can't see this hitting active farmers - the article relates to closing a loophole which is being abused by those it was never designed to cover. The relief is a genuine relief which is the government saw fit to introduce - it's the abuse that they have the issue with, not the relief itself as I understand it.

 

[Chae1]

Good news.

Fed up of battling with non farming money to buy land around here.

Oil money and builders buying it for iht benefits

 

[toquark]

I can't see this hitting active farmers - the article relates to closing a loophole which is being abused by those it was never designed to cover. The relief is a genuine relief which is the government saw fit to introduce - it's the abuse that they have the issue with, not the relief itself as I understand it.

I agree. I reckon it would be fairly easy to separate farming families from land investors. I'd start by looking at the 'active farmer' status required in order to claim subs. Does the landowner actively farm the land or has it been bought to sit on/immediately rent out? Does it form part of an agricultural buisness? Do they own stock or machinery associated with arable? Sure there will be work-arounds made by clever investors but it may help stem the flood of money being piled into land which blocks new entrants out entirely or forces them into eye-watering debt which will never be farmed out of.

 

[farmerm]

I can't see this hitting active farmers - the article relates to closing a loophole which is being abused by those it was never designed to cover. The relief is a genuine relief which is the government saw fit to introduce - it's the abuse that they have the issue with, not the relief itself as I understand it.

As ever the devil is in the details but don't be surprised if the decide to keep it simple and throw the baby out with the bathwater!

 

[Steevo]

Well maybe some changes are necessary but they need to aware that “normal” farming isn’t awash with money to pay these taxes and quite a few business could be forced to sell up to pay what’s owed. That could also depress land prices and the spiral continues.

I have looked at a lot of alternative enterprises in this country and by and large the biggest brake on the system is taxation of one sort or another. Even lowly caravan storage makes one susceptible to business rates making the idea largely unviable financially. The same has happened to the high street crippled by rates. I sometimes wonder if anybody in power really understands how business works. We just don’t have an unlimited pot to draw on and it gets to the point where staying in bed is the most pragmatic option.

I think this second paragraph is very true indeed.

 

[Still Farming]

Too many wize guys using loop holes so KNACKER it up for Genuine hard working generation farmers AGAIN!!!!

 

[Steevo]

I agree. I reckon it would be fairly easy to separate farming families from land investors. I'd start by looking at the 'active farmer' status required in order to claim subs. Does the landowner actively farm the land or has it been bought to sit on/immediately rent out? Does it form part of an agricultural buisness? Do they own stock or machinery associated with arable? Sure there will be work-arounds made by clever investors but it may help stem the flood of money being piled into land which blocks new entrants out entirely or forces them into eye-watering debt which will never be farmed out of.

Whilst many may not officially agree with the steps he has taken, Dyson is clearly an active farmer despite his money coming from outside of farming originally. If nothing else the level of investment in yards, buildings, machinery, stone walls etc. is clear compared to a property developer who is just land banking or such.

 

[Still Farming]

Whilst many may not officially agree with the steps he has taken, Dyson is clearly an active farmer despite his money coming from outside of farming originally. If nothing else the level of investment in yards, buildings, machinery, stone walls etc. is clear compared to a property developer who is just land banking or such.

Think "buzz words" are off setting????

 

[D14]

Any land owners out there doing it properly and farming it, this could easily halve the value of the asset which then could cause issues elsewhere with borrowings etc.

 

[Campani]

To play devils advocate, why shouldn't inheritance tax be paid on farmland? I understand it will mean offspring paying a big bill when they inherit the farm, but not really as extreme as a new entrant trying to buy land?

I'm biased obviously because I'm not going to inherit any land, and with current prices, cant see how I will have any to leave to my kids either.

 

[D14]

To play devils advocate, why shouldn't inheritance tax be paid on farmland? I understand it will mean offspring paying a big bill when they inherit the farm, but not really as extreme as a new entrant trying to buy land?

I'm biased obviously because I'm not going to inherit any land, and with current prices, cant see how I will have any to leave to my kids either.

Simply because the potential earnings off the land can't pay for it, even if its only a percentage. It would finish majority of farms whilst at the same time devaluing the backbone of the country - the land value.
With subsidy going every single farmer with arable land is going to loose about £80/acre/year income. Thats there profit so whats left to pay IHT to maintain keeping the land? Nothing basically which then sees an influx of land on the market with not enough demand.

 

[Lincsman]

If it happens and land prices crash to half, the tax is then half... so wont be all bad.

 

[Still Farming]

Will there be state run farms in the end as they'll rob you always?

 

[farmerm]

If it happens and land prices crash to half, the tax is then half... so wont be all bad.

Inheritance tax is a matter of timing... Without IHT relief there will be cases where one farmers son pays nothing to inherit the family farm because his parents hands the farm over in their 60's and lives to their 80's, meanwhile his mates parents die in a car accident at 50 leaving his mate in the position of having an unaffordable tax bill and loosing not only both his parents but also the family farm, that can never be right?

IHT should be entirely abolished with better taxes targeting earnings and capital gains during life not talking someone lifesavings from them at their death.

 

[How much]

Whilst many may not officially agree with the steps he has taken, Dyson is clearly an active farmer despite his money coming from outside of farming originally. If nothing else the level of investment in yards, buildings, machinery, stone walls etc. is clear compared to a property developer who is just land banking or such.

I dont suppose Dyson would have invested in all that farmland if it where not for the tax breaks it creates for his personal wealth , yes he is farming but are those "farming cost" in line with the personal capital invested ? You could argue it either way I guess but i think not really

I think allot of developers and certainty the big PLC house builders wont have invested personal wealth in land , it would be there company cash they have invested and they wont get any tax relief on that in any case so in that regard it would not effect them , that is not say some privately owned house builders wont have done as you suggest.

In essence farmland is way over valued , if you cant make money from buying its over valued , so as it is a farmer could not realistically buy arable land with any real world financial situation that had a mix of farming related profit invested say 20% of land value plus some borrowed money and a make a return farming it , in most instances i would think even servicing the debt would be very problematic.