Treasury eyeing up IHT reliefs in upcoming budget?

Campani

Member
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. That's 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.

The end result would be that land prices are more closely aligned with the profit that can be made from farming?

For people looking to get into the industry, I would think that sounds like a good deal. Obviously crap if you own land and lose a big chunk of net worth.
 

digger64

Member
The end result would be that land prices are more closely aligned with the profit that can be made from farming?

For people looking to get into the industry, I would think that sounds like a good deal. Obviously crap if you own land and lose a big chunk of net worth.
Only if you intend to sell or are mortgaged again st it , if you intend to replace it then that should fall pro rata
 

Steevo

Member
Location
Gloucestershire
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.

Perhaps not.....but he has an interest in farming and is actually farming the land as trade/business. That's what counts - he's playing by the rules.

Regarding farmland being overvalued - I'd suggests it's UK commodity prices that are out of kilter, rather than the land. The land market is warped by rollover money admittedly, however commodity prices are warped in the opposite way also.
 

D14

Member
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.

Land is not over valued at all. The potential earnings from it is the problem because they are massively undervalued. The problem is cheap food rules the world!
 

fgc325j

Member
Clickbait or a case of no smoke without fire?


What if the Chancellor got rid of the IHT relief on Agricultural land, and instead, as happens on the continent and the USA,
that a yearly land tax has to be paid instead. I believe that in France this is approx. 40euros an acre - although i am happy
to be corrected on this. They will get their pound of flesh - somehow.
 

Lincsman

Member
Arable Farmer
Location
Lincolnshire
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.

All very true, but taking it to the extreme, if land falls to £100/acre, a bit of tax wont make much difference to ether case, its a bit like renting land, if BPS was set at £1000/acre the rents will go up to match, values always level out according to the rules of the day.
 

Tubbylew

Member
Location
Herefordshire
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.

Tis better to be born lucky, than rich.
 

Steevo

Member
Location
Gloucestershire
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.

For the same reason that the haulage firm down the road won't have to pay IHT on all their lorries, warehouse space etc. if one of the partners in the business dies. If a 40y/o business partner was diagnoses with terminal cancer, their death could spell the complete end for the whole business. If this happened throughout the country to every business, in a very short time the government would own more assets than the population and it it could resemble a communist country rather quickly, yet there would be minimal economic activity and the country as a whole would rather grind to a halt.

Farmland is a business asset for many farms. Without the land, there would not be a farm.

They could rent it of course.....but who would want to own land and rent it out to a third party knowing that on death they would be liable for IHT on the full value.
 

Steevo

Member
Location
Gloucestershire
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.

I agree with this wholeheartedly.
 

Campani

Member
For the same reason that the haulage firm down the road won't have to pay IHT on all their lorries, warehouse space etc. if one of the partners in the business dies.
Wouldn't inheritance tax have to be paid on the value of the deceased share of the business? which includes the businesses assets? Genuine question, as I am no expert
 

Steevo

Member
Location
Gloucestershire

How much

Member
Location
North East
For the same reason that the haulage firm down the road won't have to pay IHT on all their lorries, warehouse space etc. if one of the partners in the business dies. If a 40y/o business partner was diagnoses with terminal cancer, their death could spell the complete end for the whole business. If this happened throughout the country to every business, in a very short time the government would own more assets than the population and it it could resemble a communist country rather quickly, yet there would be minimal economic activity and the country as a whole would rather grind to a halt.

Farmland is a business asset for many farms. Without the land, there would not be a farm.

They could rent it of course.....but who would want to own land and rent it out to a third party knowing that on death they would be liable for IHT on the full value.

i'm not a tax expert and I'm sure someone will be along to correct me soon , but as far as i am aware "that haulage company down the road " would not get tax relief on the example you quote , assuming it was private limited company as most would be and the two partners had shares , one partner dies his shares would pass to his wife assuming he is married and that is not taxable , if he was not married and left them to his son there would be death duties on his estate. If he passed the shares on to his sons and lived 7 years he would have gained a tax advantage in escaping death duties but there would still be capital gain tax to pay by either his estate or his sons assuming the value of the shares was more than the tax threshold .
There are things that could change that in that if all the companies property was held in a separate business that was classed as an investment company making more than half its income from investments or rents there would maybe be some relief on that aspect of its value but that tax advantage is offset by the stricter tax rules that the business has to work under every year so is m but non on any of the trading assets , trucks trailers etc they would gain relief like a farm would .
As i said i'm no expert but don't be thinking business outside of farming has it as good as farmers do in this regard , I'm sure there are exceptions but most business's are in worse situation by some margin tax wise
 

kiwi pom

Member
Location
canterbury NZ
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.

Never really figured out why so many are upset with Dyson.
Jealousy perhaps?
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 79 42.7%
  • Up to 25%

    Votes: 64 34.6%
  • 25-50%

    Votes: 30 16.2%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 6 3.2%

Red Tractor drops launch of green farming scheme amid anger from farmers

  • 1,287
  • 1
As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
Top