Starmergeddon: They Came And Ate Us
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Because it's not just and asset, it's also your business and your family's occupation and a way of valuing an asset for hundreds of years has been changed with <2 years notice.dpedin wrote: ↑Tue Nov 19, 2024 2:25 pm Useful analysis from BBC Verified about the number of farms actually impacted by the new IHT rate.
https://www.bbc.co.uk/news/articles/c8rlk0d2vk2o
I see the demo in London was addressed by Jeremy Clarkson who called his farm Diddly Squat due to the amount of IHT he would pay on it once he died. Fed up hearing about the cash poor, asset rich quandary facing farmers ... how many folk have an aged relative living sedately on their state pension and living in a house worth many thousands or millions and whose relatives will have to sell the asset in order to pay the IHT bill when they die? I have no idea why farmers think they should be exempt from a tax that everyone else pays? The only reason the farmers are asset rich is because of the price of land being inflated by rich individuals buying farms to avoid IHT, once the tax loophole is closed then they will invest their money elsewhere and land prices will fall. the only reason many farmers will end of paying tax is either because of poor planning or else they have benefited from a huge increase in their wealth due to rampant land prices, a bit like house prices in London?
Farming has a ridiculously low ROI, largely due to the IHT relief but also historically due to tenancies etc. Say you have a decent sized arable farm - maybe 1000 acres, that should be able to average close to 100-150K a year income. The asset value is probably close to £15 millon (10K per acre + equipment, farmhouse, buildings etc.
So, the IHT will be close to 3 million which you've got to find from 150K a year income if you want to pass it to the next generation.
If you have some clever suggestions, I'm sure the farmers would love to hear them. What will happen is family farms will be taken over by large businesses who won't be paying any IHT.
- Paddington Bear
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Inheriting a home and inheriting a working farm you intend to farm are not directly comparable
Old men forget: yet all shall be forgot, But he'll remember with advantages, What feats he did that day
No they're not. I know a fair few farmers, some of whom will be affected by this change, I'd say the ones who will be most affected are the ones that don't really have much business sense. Unfortunately farming is a business, so you have to have a fairly good grip of the business side of things if you want to be financially viable both day to day and on an inter generational basis.Paddington Bear wrote: ↑Tue Nov 19, 2024 3:53 pm Inheriting a home and inheriting a working farm you intend to farm are not directly comparable
If married, and with a farm house on the farm, that's £3m untaxed inheritance according to the BBC. £1m each for the farm, £325k that everyone gets each, £175k for property each.... If you've got £4m in assets, I'm going to struggle to have much empathy if you need to pay £200k in tax on that...
Give a man a fire and he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.
- Paddington Bear
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Thing is that this is affecting people who actively want to farm the land rather than cash in. If you want to farm it your asset value is irrelevant to your ability to pay the taxman.Raggs wrote: ↑Tue Nov 19, 2024 4:33 pm If married, and with a farm house on the farm, that's £3m untaxed inheritance according to the BBC. £1m each for the farm, £325k that everyone gets each, £175k for property each.... If you've got £4m in assets, I'm going to struggle to have much empathy if you need to pay £200k in tax on that...
Their plan B of sell the farm and make a tidy sum clearly means they’re not a breadline case, but it does mean that a fair number of them will be forced to sell up. And the people using farmland as a wheeze to reduce their IHT liability will move straight onto the next wheeze, unaffected
Old men forget: yet all shall be forgot, But he'll remember with advantages, What feats he did that day
- Paddington Bear
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Farmers I suppose are much like squaddies in that there’s only two things they truly hate: change and the way things are.epwc wrote: ↑Tue Nov 19, 2024 4:19 pmNo they're not. I know a fair few farmers, some of whom will be affected by this change, I'd say the ones who will be most affected are the ones that don't really have much business sense. Unfortunately farming is a business, so you have to have a fairly good grip of the business side of things if you want to be financially viable both day to day and on an inter generational basis.Paddington Bear wrote: ↑Tue Nov 19, 2024 3:53 pm Inheriting a home and inheriting a working farm you intend to farm are not directly comparable
A large amount could definitely diversify their businesses and generally be savvier. With that said, it’s easy for me to say from the cheap seats and is easier said than done when you don’t have start up capital.
Old men forget: yet all shall be forgot, But he'll remember with advantages, What feats he did that day
The price will drop off it's no longer a tax dodge. Won't effect working farmers, except to reduce their tax bill. And perhaps make farming more accessible again.Paddington Bear wrote: ↑Tue Nov 19, 2024 4:47 pmThing is that this is affecting people who actively want to farm the land rather than cash in. If you want to farm it your asset value is irrelevant to your ability to pay the taxman.Raggs wrote: ↑Tue Nov 19, 2024 4:33 pm If married, and with a farm house on the farm, that's £3m untaxed inheritance according to the BBC. £1m each for the farm, £325k that everyone gets each, £175k for property each.... If you've got £4m in assets, I'm going to struggle to have much empathy if you need to pay £200k in tax on that...
Their plan B of sell the farm and make a tidy sum clearly means they’re not a breadline case, but it does mean that a fair number of them will be forced to sell up. And the people using farmland as a wheeze to reduce their IHT liability will move straight onto the next wheeze, unaffected
£200k is a very straightforward mortgage to get on a £4m property I suspect, and won't require a huge income either.
Give a man a fire and he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.
£200k spread over 10 years interest free remember!Raggs wrote: ↑Tue Nov 19, 2024 4:54 pmThe price will drop off it's no longer a tax dodge. Won't effect working farmers, except to reduce their tax bill. And perhaps make farming more accessible again.Paddington Bear wrote: ↑Tue Nov 19, 2024 4:47 pmThing is that this is affecting people who actively want to farm the land rather than cash in. If you want to farm it your asset value is irrelevant to your ability to pay the taxman.Raggs wrote: ↑Tue Nov 19, 2024 4:33 pm If married, and with a farm house on the farm, that's £3m untaxed inheritance according to the BBC. £1m each for the farm, £325k that everyone gets each, £175k for property each.... If you've got £4m in assets, I'm going to struggle to have much empathy if you need to pay £200k in tax on that...
Their plan B of sell the farm and make a tidy sum clearly means they’re not a breadline case, but it does mean that a fair number of them will be forced to sell up. And the people using farmland as a wheeze to reduce their IHT liability will move straight onto the next wheeze, unaffected
£200k is a very straightforward mortgage to get on a £4m property I suspect, and won't require a huge income either.
So you can even time when you want to take the mortgage out with regards to clearing the last of it. And if course, that's assuming you have a farm with £4m in the first place.dpedin wrote: ↑Tue Nov 19, 2024 5:08 pm£200k spread over 10 years interest free remember!Raggs wrote: ↑Tue Nov 19, 2024 4:54 pmThe price will drop off it's no longer a tax dodge. Won't effect working farmers, except to reduce their tax bill. And perhaps make farming more accessible again.Paddington Bear wrote: ↑Tue Nov 19, 2024 4:47 pm
Thing is that this is affecting people who actively want to farm the land rather than cash in. If you want to farm it your asset value is irrelevant to your ability to pay the taxman.
Their plan B of sell the farm and make a tidy sum clearly means they’re not a breadline case, but it does mean that a fair number of them will be forced to sell up. And the people using farmland as a wheeze to reduce their IHT liability will move straight onto the next wheeze, unaffected
£200k is a very straightforward mortgage to get on a £4m property I suspect, and won't require a huge income either.
Give a man a fire and he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.
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A farm with a value of £4m is unlikely to be a viable business to start with. It's too small. 500 acres would be a good starting point for an actual income.Raggs wrote: ↑Tue Nov 19, 2024 5:11 pmSo you can even time when you want to take the mortgage out with regards to clearing the last of it. And if course, that's assuming you have a farm with £4m in the first place.dpedin wrote: ↑Tue Nov 19, 2024 5:08 pm£200k spread over 10 years interest free remember!Raggs wrote: ↑Tue Nov 19, 2024 4:54 pm
The price will drop off it's no longer a tax dodge. Won't effect working farmers, except to reduce their tax bill. And perhaps make farming more accessible again.
£200k is a very straightforward mortgage to get on a £4m property I suspect, and won't require a huge income either.
Stupid government again: treating every farmer the same. Instead tighten the rules on exactly what type of farm - a proper farm producing food 24/7 or a wheeze raising pheasants for 3 weeks of shooting in November- and then tax IHT accordingly. Actual food producing farms are disappearing and this will just accelerate that.
However, those assets aren't very liquid and you are getting an absolutely terrible net yield on them.Raggs wrote: ↑Tue Nov 19, 2024 4:33 pm If married, and with a farm house on the farm, that's £3m untaxed inheritance according to the BBC. £1m each for the farm, £325k that everyone gets each, £175k for property each.... If you've got £4m in assets, I'm going to struggle to have much empathy if you need to pay £200k in tax on that...
A lot of them (like fishermen) didn't help themselves by voting for Brexit and it's obvious shortcomings for the agricultural sector. The withdrawal of all EU subsidies and their replacement with support at roughly 60/70% of what they were previously receiving was never mentioned by the Tory government. Plus of course the industrial, corporate landowners like Dyson who have bought 1000's upon 1000's of acres as an ongoing investment with huge tax avoidance advantages, hoover up the vast majority of of what is in place whilst the Michael Gove dreamt up SFI scheme pays them shitloads of cash from DEFRA to turn arable fields into lovely wildflower and wildlife havens rathjer thaan growing crops. The average farmer will not have the admin expertise or enough hours in the day to complete the required paperwork to gain these subsidies in a timely fashion.Paddington Bear wrote: ↑Tue Nov 19, 2024 4:49 pmFarmers I suppose are much like squaddies in that there’s only two things they truly hate: change and the way things are.epwc wrote: ↑Tue Nov 19, 2024 4:19 pmNo they're not. I know a fair few farmers, some of whom will be affected by this change, I'd say the ones who will be most affected are the ones that don't really have much business sense. Unfortunately farming is a business, so you have to have a fairly good grip of the business side of things if you want to be financially viable both day to day and on an inter generational basis.Paddington Bear wrote: ↑Tue Nov 19, 2024 3:53 pm Inheriting a home and inheriting a working farm you intend to farm are not directly comparable
A large amount could definitely diversify their businesses and generally be savvier. With that said, it’s easy for me to say from the cheap seats and is easier said than done when you don’t have start up capital.
- Paddington Bear
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It’s dumb politics all round IMO - it raises what the government’s own figures suggest is a negligible amount of money when considered against the government’s spending commitments, and has managed to energise a really quite popular protest led by a man who has remarkable appeal across a very broad swathe of the electorateSandstorm wrote: ↑Tue Nov 19, 2024 5:36 pm Stupid government again: treating every farmer the same. Instead tighten the rules on exactly what type of farm - a proper farm producing food 24/7 or a wheeze raising pheasants for 3 weeks of shooting in November- and then tax IHT accordingly. Actual food producing farms are disappearing and this will just accelerate that.
Old men forget: yet all shall be forgot, But he'll remember with advantages, What feats he did that day
The average farm size in the UK is 88 hectares, which is 200 acres, supposedly in 2021 almost half of all farms were just 50 acres or so. Just looking at sales, quite a few 200+ acre farms for sale at or below the £3m mark, with a lot of those going for much more are basically manor houses, passing themselves off as farms.Dinsdale Piranha wrote: ↑Tue Nov 19, 2024 5:28 pmA farm with a value of £4m is unlikely to be a viable business to start with. It's too small. 500 acres would be a good starting point for an actual income.
Give a man a fire and he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.
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You'll need a couple of extra jobs to make a living on 200 acres. I know a few people doing it.Raggs wrote: ↑Tue Nov 19, 2024 6:15 pmThe average farm size in the UK is 88 hectares, which is 200 acres, supposedly in 2021 almost half of all farms were just 50 acres or so. Just looking at sales, quite a few 200+ acre farms for sale at or below the £3m mark, with a lot of those going for much more are basically manor houses, passing themselves off as farms.Dinsdale Piranha wrote: ↑Tue Nov 19, 2024 5:28 pmA farm with a value of £4m is unlikely to be a viable business to start with. It's too small. 500 acres would be a good starting point for an actual income.
The Treasury believe that 500 farms per year will be affected after changes in behaviour. I have not seen their workings, but since it's in their interests to get the projected income from the tax change correct I'd say they are more likely to be accurate than most numbers bandied about.
500 does not sound much, but that is circa 15,000 per generation as I am assuming most people have kids late 20s these days.
Again does not sound much against the 100k farms in the UK, but is a pretty significant slice of the middle sized family farms. Note the Govt says 200k farms but they do not differentiate between smallholdings, hobby farms etc and proper farms. They just count anyone eligoble for APR.
As has been repeated ad nauseam, the problem is the total disconnect between asset values and income in farming. The last Gov figures give an average return on capital of 0.5%, so on a £4m farm that is £20k profit per annum. £200k over 10 years on a £4m farm is actually the entire farm net income. Of course returns have recently been poor and historically they were higher, but the cost pressures on farmers currently, and those coming down the line, mean no one has any confidence that profits will increase.
If you inherit a house, shares, or other assets you can sell them off, pay the tax and be better off. Inherit a farm and you may be better off on paper, but until you sell the farm or part thereof, are no better off in practice. Farm incomes are already low, and selling off part of the farm to pay tax will just make it worse.
Farm prices will not drop appreciably, and this will not release land for new entrants. Farm land needs to be farmed and the person doing the farming needs to be local. A farmer selling off some land will only have a limited number of people he can realistically sell too, especially as the land will in all probability be too small to be a viable farm in its own right and have no farm buildings. It's more likely the entire farm will be sold.
The probability is that demand for farms below the threshold will go up, whilst farms above will increasingly be sold off to institutions. Farming will become increasing split between the small, struggling farms (and tax dodge farms) and big institutional investors / massive farming businesses.
Unless we do not value food production, I do think farming is special case, but I also think special rules need to be applied when money comes out. Firstly, enforce and enhance the rules that give IHT relief to proper farmers and not rich investors. Then, if and when the farmer cashes their chips in, some measure of extra tax is applied to balance the fact that APR has enabled the growth of wealth in the farm.
500 does not sound much, but that is circa 15,000 per generation as I am assuming most people have kids late 20s these days.
Again does not sound much against the 100k farms in the UK, but is a pretty significant slice of the middle sized family farms. Note the Govt says 200k farms but they do not differentiate between smallholdings, hobby farms etc and proper farms. They just count anyone eligoble for APR.
As has been repeated ad nauseam, the problem is the total disconnect between asset values and income in farming. The last Gov figures give an average return on capital of 0.5%, so on a £4m farm that is £20k profit per annum. £200k over 10 years on a £4m farm is actually the entire farm net income. Of course returns have recently been poor and historically they were higher, but the cost pressures on farmers currently, and those coming down the line, mean no one has any confidence that profits will increase.
If you inherit a house, shares, or other assets you can sell them off, pay the tax and be better off. Inherit a farm and you may be better off on paper, but until you sell the farm or part thereof, are no better off in practice. Farm incomes are already low, and selling off part of the farm to pay tax will just make it worse.
Farm prices will not drop appreciably, and this will not release land for new entrants. Farm land needs to be farmed and the person doing the farming needs to be local. A farmer selling off some land will only have a limited number of people he can realistically sell too, especially as the land will in all probability be too small to be a viable farm in its own right and have no farm buildings. It's more likely the entire farm will be sold.
The probability is that demand for farms below the threshold will go up, whilst farms above will increasingly be sold off to institutions. Farming will become increasing split between the small, struggling farms (and tax dodge farms) and big institutional investors / massive farming businesses.
Unless we do not value food production, I do think farming is special case, but I also think special rules need to be applied when money comes out. Firstly, enforce and enhance the rules that give IHT relief to proper farmers and not rich investors. Then, if and when the farmer cashes their chips in, some measure of extra tax is applied to balance the fact that APR has enabled the growth of wealth in the farm.
Looking at farm sales at the moment, and most of what I'm thinking is that if these manor houses and halls and multiple residences have been avoiding iht all this time, I'm not too upset with that turning around a little. I presume they have been, but might be wrong? The land absolutely has value, but the buildings are doing a lot of heavy lifting to the value too!
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Most viable farms are likely to be owned in a partnership or a limited company these days, that's certainly my experience with rural clients.
There are plenty of IHT planning opportunities to pass the farm on both during lifetime and on death, and if you don't own the lot, you will often benefit from a joint ownership discount of up to 15% of the market value, depending on circumstances.
The question boils down to how much are you willing to give up whilst you're alive. Are you really worried about IHT, for the kids, or do you just want to have your cake and eat it, which had only been a thing for 30 odd years anyway, so this isn't like generation after generation have relied on passing the farm down tax free.
Hell, spouse exemption didn't exist before 1972 anyway, and only fully came into swing from 1974.
There are plenty of IHT planning opportunities to pass the farm on both during lifetime and on death, and if you don't own the lot, you will often benefit from a joint ownership discount of up to 15% of the market value, depending on circumstances.
The question boils down to how much are you willing to give up whilst you're alive. Are you really worried about IHT, for the kids, or do you just want to have your cake and eat it, which had only been a thing for 30 odd years anyway, so this isn't like generation after generation have relied on passing the farm down tax free.
Hell, spouse exemption didn't exist before 1972 anyway, and only fully came into swing from 1974.
- fishfoodie
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Oh Look; what a surprise; the millionaire wankers are pushing the more sympathetic hand-to-mouth land holders to the forefront, so they can dodge yet more taxes, while playing what we in Ireland call the, Béal Bocht, the "Poor Mouth".
If Farmers wanted to march, they'd have been better served marching over why food production is an unsustainable business !
That would have at least been something that was economically explainable, & the vast majority of people can understand. If your out goings are x & your income is y, then if x isn't bigger than y, you're fucked !
The inheritance is solvable, but UK tax code is already a rats nest of exemptions & clauses designed to create a loophole for ever Tory donor past, present & future, & simplifying that is the work of more than one Parliament.
If farmers want to not pay taxes the way that everyone else does, then they need to show the rest of the taxpayers why they shouldn't pay their fair share.
This probably means separating the agricultural land, & it's income from everything else, & has hooks that kick in if land isn't farmed, & also that if the land miraculously changes zoning & thus becomes much more valuable, then that miracle has no benefit to the owner, because the tax owed is still owed on the new valuation.
Every Nation needs to put a value on food security, & the "Green & Pleasant Land" factor, & how much food costs, & then that will have them asking exactly how much profit does Tesco need to make on the price of a burger, versus the farmer. If the answer from the consumer goes one way, then the UK farmers future is secure; if it goes the other; then it's hello chlorine washed chicken, & beef with more steroids than an East German Shot Putter !
If Farmers wanted to march, they'd have been better served marching over why food production is an unsustainable business !
That would have at least been something that was economically explainable, & the vast majority of people can understand. If your out goings are x & your income is y, then if x isn't bigger than y, you're fucked !
The inheritance is solvable, but UK tax code is already a rats nest of exemptions & clauses designed to create a loophole for ever Tory donor past, present & future, & simplifying that is the work of more than one Parliament.
If farmers want to not pay taxes the way that everyone else does, then they need to show the rest of the taxpayers why they shouldn't pay their fair share.
This probably means separating the agricultural land, & it's income from everything else, & has hooks that kick in if land isn't farmed, & also that if the land miraculously changes zoning & thus becomes much more valuable, then that miracle has no benefit to the owner, because the tax owed is still owed on the new valuation.
Every Nation needs to put a value on food security, & the "Green & Pleasant Land" factor, & how much food costs, & then that will have them asking exactly how much profit does Tesco need to make on the price of a burger, versus the farmer. If the answer from the consumer goes one way, then the UK farmers future is secure; if it goes the other; then it's hello chlorine washed chicken, & beef with more steroids than an East German Shot Putter !
We (only my brother these days) have one of these generational farms and you are right about the ownership structure aspect. If the younger generation is actually involved in the farm business, they are going to be a partner or a director, and there really should be some sort of transferring going on well before death anyway - retirement age would be a good cue to partially step back, for example.Hal Jordan wrote: ↑Tue Nov 19, 2024 8:15 pm Most viable farms are likely to be owned in a partnership or a limited company these days, that's certainly my experience with rural clients.
There are plenty of IHT planning opportunities to pass the farm on both during lifetime and on death, and if you don't own the lot, you will often benefit from a joint ownership discount of up to 15% of the market value, depending on circumstances.
The question boils down to how much are you willing to give up whilst you're alive. Are you really worried about IHT, for the kids, or do you just want to have your cake and eat it, which had only been a thing for 30 odd years anyway, so this isn't like generation after generation have relied on passing the farm down tax free.
Hell, spouse exemption didn't exist before 1972 anyway, and only fully came into swing from 1974.
IHT is more of an issue when the next generation doesn't want to take on the farm.
The big problem is the inflated land prices, which probably are driven partially by IHT as well as investors wanting to own real assets in a time of currency weakness. I think farmers recognise that prices are absurd and damaging to the industry, but then none of them will want the value of their own land to fall, which ultimately is what these legislative changes are driving at. It's a bit like house prices: you can get a consensus that they are too high in the UK but people would be rioting if they thought the government was trying to make them fall.
Average farm size in the uk is 80 hectares, around 200 acres. So you’ve picked an example which doesn’t portray the average situation.Dinsdale Piranha wrote: ↑Tue Nov 19, 2024 3:36 pmBecause it's not just and asset, it's also your business and your family's occupation and a way of valuing an asset for hundreds of years has been changed with <2 years notice.dpedin wrote: ↑Tue Nov 19, 2024 2:25 pm Useful analysis from BBC Verified about the number of farms actually impacted by the new IHT rate.
https://www.bbc.co.uk/news/articles/c8rlk0d2vk2o
I see the demo in London was addressed by Jeremy Clarkson who called his farm Diddly Squat due to the amount of IHT he would pay on it once he died. Fed up hearing about the cash poor, asset rich quandary facing farmers ... how many folk have an aged relative living sedately on their state pension and living in a house worth many thousands or millions and whose relatives will have to sell the asset in order to pay the IHT bill when they die? I have no idea why farmers think they should be exempt from a tax that everyone else pays? The only reason the farmers are asset rich is because of the price of land being inflated by rich individuals buying farms to avoid IHT, once the tax loophole is closed then they will invest their money elsewhere and land prices will fall. the only reason many farmers will end of paying tax is either because of poor planning or else they have benefited from a huge increase in their wealth due to rampant land prices, a bit like house prices in London?
Farming has a ridiculously low ROI, largely due to the IHT relief but also historically due to tenancies etc. Say you have a decent sized arable farm - maybe 1000 acres, that should be able to average close to 100-150K a year income. The asset value is probably close to £15 millon (10K per acre + equipment, farmhouse, buildings etc.
So, the IHT will be close to 3 million which you've got to find from 150K a year income if you want to pass it to the next generation.
If you have some clever suggestions, I'm sure the farmers would love to hear them. What will happen is family farms will be taken over by large businesses who won't be paying any IHT.
That’s what people are doing here, pretending big farms and big assets are the average.
And are there two g’s in Bugger Off?
200-acre farms are probably not being farmed by a family and are not being passed on as a business.Biffer wrote: ↑Wed Nov 20, 2024 5:38 amAverage farm size in the uk is 80 hectares, around 200 acres. So you’ve picked an example which doesn’t portray the average situation.Dinsdale Piranha wrote: ↑Tue Nov 19, 2024 3:36 pmBecause it's not just and asset, it's also your business and your family's occupation and a way of valuing an asset for hundreds of years has been changed with <2 years notice.dpedin wrote: ↑Tue Nov 19, 2024 2:25 pm Useful analysis from BBC Verified about the number of farms actually impacted by the new IHT rate.
https://www.bbc.co.uk/news/articles/c8rlk0d2vk2o
I see the demo in London was addressed by Jeremy Clarkson who called his farm Diddly Squat due to the amount of IHT he would pay on it once he died. Fed up hearing about the cash poor, asset rich quandary facing farmers ... how many folk have an aged relative living sedately on their state pension and living in a house worth many thousands or millions and whose relatives will have to sell the asset in order to pay the IHT bill when they die? I have no idea why farmers think they should be exempt from a tax that everyone else pays? The only reason the farmers are asset rich is because of the price of land being inflated by rich individuals buying farms to avoid IHT, once the tax loophole is closed then they will invest their money elsewhere and land prices will fall. the only reason many farmers will end of paying tax is either because of poor planning or else they have benefited from a huge increase in their wealth due to rampant land prices, a bit like house prices in London?
Farming has a ridiculously low ROI, largely due to the IHT relief but also historically due to tenancies etc. Say you have a decent sized arable farm - maybe 1000 acres, that should be able to average close to 100-150K a year income. The asset value is probably close to £15 millon (10K per acre + equipment, farmhouse, buildings etc.
So, the IHT will be close to 3 million which you've got to find from 150K a year income if you want to pass it to the next generation.
If you have some clever suggestions, I'm sure the farmers would love to hear them. What will happen is family farms will be taken over by large businesses who won't be paying any IHT.
That’s what people are doing here, pretending big farms and big assets are the average.
fishfoodie wrote: ↑Wed Nov 20, 2024 12:47 am.
Every Nation needs to put a value on food security, & the "Green & Pleasant Land" factor, & how much food costs, & then that will have them asking exactly how much profit does Tesco need to make on the price of a burger, versus the farmer. If the answer from the consumer goes one way, then the UK farmers future is secure; if it goes the other; then it's hello chlorine washed chicken, & beef with more steroids than an East German Shot Putter !
The UK and Ireland are two of a handful of countries where we spend less than 10% of our household income on food. Comparable countries like France and Germany are up to 5 or 6 percentage points more.
We don’t value food or the producers in the UK. The answer to your question will undoubtedly be, “as long as it’s cheap, bring on the chlorine chicken and fridge raiders”
It’s something that is starting to really annoy me in the supermarket, you can walk up and down aisle after aisle of shite and not see any actual food, it’s sweepings off the abattoir floor or fried potatoes of some description.
The generation below us is the first in history to be expected to have lower life expectancy than their parents due to living off cheesy wotsits and red bull.
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Labour are going to have to u-turn on this one. It's clear that the calculations on how many farmers will be affected are wrong and they'll have to find a more targeted approach for Dyson and Clarkson et al.
If they think the current pushback is bad wait until Clarksons Farm series 4 the antagonists are Reeves and Starmer.
If they think the current pushback is bad wait until Clarksons Farm series 4 the antagonists are Reeves and Starmer.
This is starting to look a lot like the winter fuel allowance outcry. The more that was explained and dug into, the more ridiculous it seemed that there should be any outcry, people were demanding they receive a benefit without any means testing which they manifestly didn't need. Land owners/farmers are an even more heavily Tory group, probably not true they voted for Brexit in the majority but I've seen nothing credible which puts their support for Brexit below 40%, they are the interest group Brexit was disproportionately about and they have been disproportionately harmed by it, yet the protests against the Tories from them were few. Labour get in and make some minor tax change which will not impact most of them and like the winter fuel allowance crew they completely lose their minds over it.
Not many of these people are ever voting Labour. It looks obvious farmers will blame Labour for the long term consequences of the Brexit they support for example. What Starmer should take from all this is that whatever he does which doesn't 100% benefit the Tory base results in an outcry amplified by the entire media, this reaction to not much means there's no additional damage from cutting deeper. If it's literally only small groups of millionaires losing out then the media coverage doesn't matter politically.
The fundamental problems in the UK are no growth, structural deficit, and an aging population. Not realistic to expect a graduate stuffed into an East London HMO on £30k to fix all that by fucking them harder.
Not many of these people are ever voting Labour. It looks obvious farmers will blame Labour for the long term consequences of the Brexit they support for example. What Starmer should take from all this is that whatever he does which doesn't 100% benefit the Tory base results in an outcry amplified by the entire media, this reaction to not much means there's no additional damage from cutting deeper. If it's literally only small groups of millionaires losing out then the media coverage doesn't matter politically.
The fundamental problems in the UK are no growth, structural deficit, and an aging population. Not realistic to expect a graduate stuffed into an East London HMO on £30k to fix all that by fucking them harder.
Which is why Labour shouldn't talk about immigration. It's a stalking horse for other grievances and/or racism. Voters activated by immigration are never voting Labour.Biffer wrote: ↑Sun Nov 17, 2024 4:25 pmBecause they thought that it would make them look harder on immigration.tabascoboy wrote: ↑Sun Nov 17, 2024 1:13 pmMakes you wonder why the previous Government kept shouting "RWANDA DEAL!" at everyone for months, and just where all that money went ( as if we didn't know), don't it?Raggs wrote: ↑Sat Nov 16, 2024 8:35 pm So turns out if you get on with it, you can make things better without wasting hundreds of millions on 4 people.
The 3 biggest deportation flights have taken place under this government. And a big increase in forced deporations. As well as sending a criminal helping lots of people crossing the channel to court.
https://www.mirror.co.uk/news/politics/ ... d-34124726
It's irrelevant that Labour's record on immigration is better than the Tories. Under New Labour there was a fairer more functional system for immigrants and lower numbers. Nearly the entire discussion is not about the nuts and bolts of immigration. The vast majority of voters activated by the subject do not care how the immigration works (or more often doesn't), it's just a massive dog whistle for people who will never be happy. If Labour implemented a properly funded system that was more efficient for everyone that uses it producing net immigration numbers of around 250k-300k, in other words the best they can do, there would still be people absolutely raging mad about that.
I'm just trying to think this through.
Because farming and, well... living I suppose are so interlinked, is this 20 grand pure profit?
i.e. maybe no monthly mortgage costs because the house is on the farm? No monthly energy/petrol costs because that's all part of the business equation that leaves 20 grand? A bit of a reduction in monthly food costs, using stuff grown/reared?
I don't know, just trying to make it add up. Maybe some of the more knowledgeable on here of the lifestyle can comment?
I grew up in the countryside, knew a fair few famers. It was different times back then of course, but a lot of the farmers I knew didn't really want to go on extravagant holidays for example. They got huge fulfillment from their job, I don't know how to factor that into things when talking about profit.
Really?I like neeps wrote: ↑Wed Nov 20, 2024 8:02 am Labour are going to have to u-turn on this one. It's clear that the calculations on how many farmers will be affected are wrong and they'll have to find a more targeted approach for Dyson and Clarkson et al.
If they think the current pushback is bad wait until Clarksons Farm series 4 the antagonists are Reeves and Starmer.
Neeps - read BBC Verified report and then tell me their calculations are wrong!SaintK wrote: ↑Wed Nov 20, 2024 9:59 amReally?I like neeps wrote: ↑Wed Nov 20, 2024 8:02 am Labour are going to have to u-turn on this one. It's clear that the calculations on how many farmers will be affected are wrong and they'll have to find a more targeted approach for Dyson and Clarkson et al.
If they think the current pushback is bad wait until Clarksons Farm series 4 the antagonists are Reeves and Starmer.
https://www.bbc.co.uk/news/articles/c8rlk0d2vk2o
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1000 made the maths nice and easy. It's also about the size of of my two uncle's farms - they were both tenant farmers - and therefore enough to provide a decent living.Biffer wrote: ↑Wed Nov 20, 2024 5:38 amAverage farm size in the uk is 80 hectares, around 200 acres. So you’ve picked an example which doesn’t portray the average situation.Dinsdale Piranha wrote: ↑Tue Nov 19, 2024 3:36 pmBecause it's not just and asset, it's also your business and your family's occupation and a way of valuing an asset for hundreds of years has been changed with <2 years notice.dpedin wrote: ↑Tue Nov 19, 2024 2:25 pm Useful analysis from BBC Verified about the number of farms actually impacted by the new IHT rate.
https://www.bbc.co.uk/news/articles/c8rlk0d2vk2o
I see the demo in London was addressed by Jeremy Clarkson who called his farm Diddly Squat due to the amount of IHT he would pay on it once he died. Fed up hearing about the cash poor, asset rich quandary facing farmers ... how many folk have an aged relative living sedately on their state pension and living in a house worth many thousands or millions and whose relatives will have to sell the asset in order to pay the IHT bill when they die? I have no idea why farmers think they should be exempt from a tax that everyone else pays? The only reason the farmers are asset rich is because of the price of land being inflated by rich individuals buying farms to avoid IHT, once the tax loophole is closed then they will invest their money elsewhere and land prices will fall. the only reason many farmers will end of paying tax is either because of poor planning or else they have benefited from a huge increase in their wealth due to rampant land prices, a bit like house prices in London?
Farming has a ridiculously low ROI, largely due to the IHT relief but also historically due to tenancies etc. Say you have a decent sized arable farm - maybe 1000 acres, that should be able to average close to 100-150K a year income. The asset value is probably close to £15 millon (10K per acre + equipment, farmhouse, buildings etc.
So, the IHT will be close to 3 million which you've got to find from 150K a year income if you want to pass it to the next generation.
If you have some clever suggestions, I'm sure the farmers would love to hear them. What will happen is family farms will be taken over by large businesses who won't be paying any IHT.
That’s what people are doing here, pretending big farms and big assets are the average.
200 acres is unlikely to provide a sustainable income on its own. You had better have another job and it doesn't alter the fact that you are well within the IHT bracket with very little way to pay it.
The Clarkson/Tory take on the figures are completely wrongdpedin wrote: ↑Wed Nov 20, 2024 10:02 amNeeps - read BBC Verified report and then tell me their calculations are wrong!SaintK wrote: ↑Wed Nov 20, 2024 9:59 amReally?I like neeps wrote: ↑Wed Nov 20, 2024 8:02 am Labour are going to have to u-turn on this one. It's clear that the calculations on how many farmers will be affected are wrong and they'll have to find a more targeted approach for Dyson and Clarkson et al.
If they think the current pushback is bad wait until Clarksons Farm series 4 the antagonists are Reeves and Starmer.
https://www.bbc.co.uk/news/articles/c8rlk0d2vk2o
https://committees.parliament.uk/publi ... efault/Up to around 520 estates a year who claim APR (including those that also claim
BPR) across the UK will be impacted to some extent by these changes.
Excluding those claims that include AIM shares reduces this number to up to
around 430.
• Almost three-quarters of estates claiming APR (including those that also claim
BPR) are unaffected by these changes. This equals 71% of all claims involving
any APR, and 76% when those including AIM claims are excluded.
• Historic data shows that, in 2021-22, 84% of claims for APR only (with no
BPR) made by estates were worth less than £1.5m.
• The data also show that, in 2021-22, where an estate was claiming APR and
BPR where applicable, 78% of claims made by estates were worth less than
£1.5m.
• On average over the period 2018-19 to 2021-22, 47% of the benefit of the reliefs
went to the top 7% of estates making claims.
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Yep, DEFRA and the treasury are in quite a lot of disagreement over it.SaintK wrote: ↑Wed Nov 20, 2024 9:59 amReally?I like neeps wrote: ↑Wed Nov 20, 2024 8:02 am Labour are going to have to u-turn on this one. It's clear that the calculations on how many farmers will be affected are wrong and they'll have to find a more targeted approach for Dyson and Clarkson et al.
If they think the current pushback is bad wait until Clarksons Farm series 4 the antagonists are Reeves and Starmer.
How much of that value is down to the residence though? The most expensive farms I'm seeing for sale on the sites I checkde had manor houses, and multiple residencies. These alone are worth multiple millions in any other circumstance, and should be looking at the full 40% IHT at just £1m, rather than 20% after £3m (or we can go with £500k and £1.5m).Dinsdale Piranha wrote: ↑Wed Nov 20, 2024 10:28 am1000 made the maths nice and easy. It's also about the size of of my two uncle's farms - they were both tenant farmers - and therefore enough to provide a decent living.Biffer wrote: ↑Wed Nov 20, 2024 5:38 amAverage farm size in the uk is 80 hectares, around 200 acres. So you’ve picked an example which doesn’t portray the average situation.Dinsdale Piranha wrote: ↑Tue Nov 19, 2024 3:36 pm
Because it's not just and asset, it's also your business and your family's occupation and a way of valuing an asset for hundreds of years has been changed with <2 years notice.
Farming has a ridiculously low ROI, largely due to the IHT relief but also historically due to tenancies etc. Say you have a decent sized arable farm - maybe 1000 acres, that should be able to average close to 100-150K a year income. The asset value is probably close to £15 millon (10K per acre + equipment, farmhouse, buildings etc.
So, the IHT will be close to 3 million which you've got to find from 150K a year income if you want to pass it to the next generation.
If you have some clever suggestions, I'm sure the farmers would love to hear them. What will happen is family farms will be taken over by large businesses who won't be paying any IHT.
That’s what people are doing here, pretending big farms and big assets are the average.
200 acres is unlikely to provide a sustainable income on its own. You had better have another job and it doesn't alter the fact that you are well within the IHT bracket with very little way to pay it.
Give a man a fire and he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.
This is part of the 'lies, damn lies and statistics' that allow different parties to present the situation in a way that suits.
Govt figures that arrive at the 80h average include all holdings that meet the tax definition of 'farm'. There are 200k of these. Half of these are under 20 hectares and are not remotely farms in any commonly understood meaning of the word. These are the hobby farms, houses with a few paddocks etc and they drag the average size down dramatically. Even assuming that all of these are 20h, take these out and the average for the rest goes up to 140h or 350 acres. These are all very crude.
This is exactly the kind of thing that allows politicians to talk a if hardly anyone is affected as the include these tens of thousands of smallholdings that are not remotely farms. Farmers on the other hand are talking about genuine working a farm to make a living farms which are typically much bigger. Farmers are however doing themselves no favours by vastly over egging the pudding.
It is terrible legislation in that there are plenty of low hanging fruit that could have greatly increased the tax take by dealing with genuine abuse of the system. Rather find a way to go after them and leave the genuine farmers to get on with it.
Last edited by weegie01 on Wed Nov 20, 2024 12:16 pm, edited 1 time in total.
In the simplest sense, everything that conceivably can, and quite a lot that should not, will go through the farm as a business expense.C T wrote: ↑Wed Nov 20, 2024 9:48 amI'm just trying to think this through.
Because farming and, well... living I suppose are so interlinked, is this 20 grand pure profit?
i.e. maybe no monthly mortgage costs because the house is on the farm? No monthly energy/petrol costs because that's all part of the business equation that leaves 20 grand? A bit of a reduction in monthly food costs, using stuff grown/reared?
I don't know, just trying to make it add up. Maybe some of the more knowledgeable on here of the lifestyle can comment?
I grew up in the countryside, knew a fair few famers. It was different times back then of course, but a lot of the farmers I knew didn't really want to go on extravagant holidays for example. They got huge fulfillment from their job, I don't know how to factor that into things when talking about profit.
Also, current yields are 0.5%, the previous figures were 1%. Still crap but much better. Farming has good times and bad, right now it is in a very bad period with input prices going up hugely, output prices not keeping pace, whilst terrible weather is lowering output.
Last edited by weegie01 on Wed Nov 20, 2024 12:17 pm, edited 1 time in total.
This has nothing to do with the low numbers the government have. They literally gave the number of farms inherited last year as their figures. The 500 a year includes 345, that wouldn't even qualify if held by a married couple.weegie01 wrote: ↑Wed Nov 20, 2024 12:10 pmThis is part of the 'lies, damn lies and statistics' that allow different parties to present the situation in a way that suits.
Govt figures that arrive at the 80h average include all holdings that meet the tax definition of 'farm'. There are 200k of these. Half of these are under 20 hectares and are not remotely farms in any commonly understood meaning of the word. These are the hobby farms, houses with a few paddocks etc and they drag the average size down dramatically. Even assuming that all of these are 20h, take these out and the average for the rest goes up to 140h or 350h. These are all very crude.
This is exactly the kind of thing that allows politicians to talk a if hardly anyone is affected as the include these tens of thousands of smallholdings that are not remotely farms. Farmers on the other hand are talking about genuine working a farm to make a living farms which are typically much bigger. Farmers are however doing themselves no favours by vastly over egging the pudding.
It is terrible legislation in that there are plenty of low hanging fruit that could have greatly increased the tax take by dealing with genuine abuse of the system. Rather find a way to go after them and leave the genuine farmers to get on with it.
Give a man a fire and he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.