Far right attempting to subvert the farmers protests in London.

The obvious thing you are missing is that farmers don’t have pensions. So they hold out until the end.

https://www.farminguk.com/news/proportion-of-farmers-saving-for-later-life-increases_60277.html

Approximately three-quarters (75%) of farmers in the UK now have pensions, reflecting a steady increase in retirement planning among this group. This growth is supported by initiatives like automatic enrollment for workplace pensions and a broader emphasis on financial planning within the farming community. For employees within agriculture, the proportion participating in workplace pensions rose from 16.6% in 2012 to 64.3% in 2021

If you have a business that is valued at £2 million and you can’t make minimum wage working 7 days a week, then why would you keep it?

+1, just sell the land and keep the machinery etc; those buying the land for investment still need someone to work it – my Great Uncle was in the agricultural contracting business years ago, they rented land across a quite wide area.

But the recent changes in NI for anything other than tiny businesses is liable to have a far more damaging and instantaneous change on the lives of hundreds of thousands of people

When something is implemented that impacts every business in a sector, it’s the more efficient ones that gain (the advantage).

Having spoken to a couple of farmers. They dont object to the principle. However they do object to:

1. No prior negotiation or warning.

2. The threshold is set far too low ie no farm today is less than the threshold put in place. It will capture every farm, not just those that are bought up by rich people as a tax loophole.

They said everything is bought on loans, using the land and family home as the guarantee. They are not cash rich. So yes on paper the assets of the farm will be way in excess of £1m but profit margins are negligible and then they are supposed to find money to pay inheritance tax out of the none existent profits.

They both said it will actually just mean that more land goes to the superrich as the tax is still a drop in the ocean for them.

This forum has always been a very bitter and twisted place when it comes to people who have created wealth or perceived to be wealthy, the facts are almost irrelevant if it allows sweeping generalisations to be made and the politics of envy to be played out.

As to Clarkson, both of them said he has done a lot to showcase how farming works in the UK, and how hard it can be.

If you have a business that is valued at £2 million and you can’t make minimum wage working 7 days a week, then why would you keep it?

I thought STW was full of socialists? They see themselves as doing a vocation and custodians of the land, its been handed down through generations. There are still quite a few privately owned farms where I live, but one owned by https://yareal.co.uk/

The local farmers help people out, maintain the local area. Yareal have broken planning rules, discharge to the local river, destroyed roads etc. They dont care about the local community,

They said everything is bought on loans, using the land and family home as the guarantee.

I had an interesting discussion about this, customer said that a combine is worth 750k so just the equipment in a farm can be well over the exemption bracket. But if it’s bought on a loan, wouldn’t the loan right off some of the iht value?

5mil in assets, 2mil in debts = 3mil so inheritance taxable value would be between 400k and 2mil (after exemption) not 4?

Customer didn’t know the answer to this and neither do I.

But the recent changes in NI for anything other than tiny businesses is liable to have a far more damaging and instantaneous change on the lives of hundreds of thousands of people

I’d agree – the farming iht changes are getting far too much attention in comparison to this. Lots of small businesses in  my area are talking of job cuts, introduction of ai replacement and slimming of the workforce. My daughter, currently looking for work, has noticed a post budget drop in advertised positions.

When something is implemented that impacts every business in a sector, it’s the more efficient ones that gain (the advantage).

That is indeed a solid capitalist principle, but if my memory from the 80s serves me, it can involve a lot of pain for individuals while this transition to a leaner, more efficient model takes place. And at a time when many businesses are struggling with a variety of economic shocks – Brexit, energy costs etc – this has the potential to devastate relatively efficient and potentially profitable businesses alongside the basket cases.

twisted place when it comes to people who have created wealth or perceived to be wealthy

Not sure about everyone else, but I’d just like them to pay their fair share!

Most people with this level of wealth won’t have paid income tax, and now they put it into a tax free assets that get handed down indefinitely. Seems wrong to me.

I had an interesting discussion about this, customer said that a combine is worth 750k so just the equipment in a farm can be well over the exemption bracket. But if it’s bought on a loan, wouldn’t the loan right off some of the iht value?

Yep we had similar conversations as they cannot afford to employ a tax accountant.

One of them was telling me how TB wiped out 50 of their cows, which cost them £250k last year ie to purchase new cows.

I’ve “created wealth”.

I have 3 small businesses, that are worth more now than what I paid for them.

Between me and Mrs, we work “hard” and have took risk. We have a decent income and employ people.

I pay personal income tax, corporation tax and whoever get’s them when I die will pay inheritance tax.

Why should a farm be any different?

Rightly or wrongly, we are in a (sort of) free market economy.

How can something be worth £2,000,000 if it can only generate a return of 1.5% annually and also involves constant hard work?

Either the income generated is incorrect, (a lie?), or it isn’t worth £2,000,000.

Sell the land and invest the money into a property portfolio.

Only the insane would work an “asset” that generated so little return.

One of them was telling me how TB wiped out 50 of their cows, which cost them £250k last year ie to purchase new cows.

Bought on loan or cash?

A loan investment for a business is very different to cash.

If a farm makes very little per head of cattle, a loan seems a bad idea, if it’s 250k in cash then its either not a small business or cash heavy.

I have 3 small businesses, that are worth more now than what I paid for them.

Edit*

I pay personal income tax, corporation tax and whoever get’s them when I die will pay inheritance tax.

If they are limited companies they will be subject to business relief and exemption from iht I believe?

Why should a farm be any different?

Again putting the socialist hat on, they are custodians of the land, and look after the land and community. Big business does neither, and most farms will go big business because of this change

Bought on loan or cash?

Loan, they simply wouldnt have £250k to buy new ones !

If they are limited companies they will be subject to business relief and exemption from iht I believe?

Not 100%. Although I haven’t really looked at as we don’t have any children.

Also, there’s nothing to stop a farm being held by a Limited Company.

Sell the land and invest the money into a property portfolio.

Only the insane would work an “asset” that generated so little return.

It’s a good job there are a few of those insane people though.  It would be difficult to feed a country of 70 million people on student lets etc.

One of them was telling me how TB wiped out 50 of their cows, which cost them £250k last year ie to purchase new cows.

Did they not get the government compensation for this TB loss?

I know a few small farmers they accept that farming is no longer sustainable as a sole source income and have other jobs ( they also have succession planning in place, as much as any farmer will tell you about their business, profits etc 😉 ).

That’s not how economics works. The agricultural land is still there for food production. What may change is the business model by which the land is cultivated for that food production. And almost half (46%) of the food for those 70 million is already imported.

It’s a good job there are a few of those insane people though. It would be difficult to feed a country of 70 million people on student lets etc.

I am not suggesting that the land is destroyed.

I would argue that the value of a business that can only generate a return of 1.5%, after a great deal of hard work, then that business is grossly overvalued.

If the business was valued at something more realistic then the IHT issue goes away for a huge number of them.

 the assets of the farm will be way in excess of £1m but profit margins are negligible

One of the unintended consequences of doing this back in the eighties is that arable land prices are out of step with reality, and every farm has to be sweated for profit simply becasue of it’s book worth. If nothing else re-aligning these will allow new entrants to the market.

And almost half (46%) of the food for those 70 million is already imported.

And 97% of all food in the UK  is bought by consumers directly through supermarkets or indirectly with wholesalers owned by supermarkets…

That’s not how economics works. The agricultural land is still there for food production.

The land might still be there, but it still needs to be farmed. I was replying to a poster who suggested anyone who was willing to do is “insane” and should do something else. But thanks for explaining economics to me. Yes, a significant proportion of our food is imported, with the associated food miles, sometimes dubious animal welfare etc. I’m not sure increasing that by suggesting farmers should  quit is a good thing.

I’m not sure increasing that by suggesting all farmers should do something else that’s a good thing.

I am not suggesting that.

I am arguing that the valuations and returns being quoted in the media are utter nonsense.

A £2,000,000 asset that can only generate £30,000 annual profit, after a great deal of hard work, is not worth £2,000,000.

Can you identify any other business sector where this would be considered an accurate valuation?

Again putting the socialist hat on, they are custodians of the land, and look after the land and community.

So this is wrong in terms of being socialist…..what you’re doing here is invoking a phenomenon called farmer or agricultural exceptionalism. Ie, agriculture should be treated differently because they’re protecting the country’s land. They’re businesses, many of the smaller ones make a loss through agriculture and rely on subsidy. They still operate as businesses first and foremost though, rather than ‘land custodian’s.

Isn’t there a bit of a circular argument going on with the land valuation?

It’s worth so much as (at least partly) people are buying it as a tax free investment.
Now a tax is proposed, people are saying it’s unfair as valuable land doesn’t produce much income.
But that was mostly the case because it was a tax free investment.

Never mind all this economics malarkey, what every true patriot will be asking on tomorrow’s demo is, did those feet in ancient time walk upon England’s mountains green?

And was the holy Lamb of God on England’s pleasant pastures seen?

Again putting the socialist hat on, they are custodians of the land, and look after the land and community.

There’s loads of socialist’s in my area, that care so much about the land and community, that they carefully raise thousands of pheasants, to generate a sustainable food source for working people. Absolute men of the people.

Since when is turning out to support a protest counted as trying to hijack it ?

 but it still needs to be farmed.

Does it? There’s an argument that says modern farming as it exists in the UK now is largely a legacy of WW2. So much land was put back into production and so much of modern farming (chemicals, over-production etc) was created. We could really do with having a conversation about the fact that hunger in the world today is mostly a distribution problem rather than a production problem, and keeping land in production in rich countries is a way of keeping poorer countries from earning export dollars.

Since when is turning out to support a protest counted as trying to hijack it ?

When your goals are very different to the goals of those organising the protest?

Hijacking is generally defined as changing the destination.

Not read all of this but Clarkson was very Remain.
I recall an article in my folks Mail on Sunday with him listing all the reasons to remain pre the vote.

Again putting the socialist hat on, they are custodians of the land, and look after the land and community

Some do but others dont treating the land as a disposable asset kept going by massive application of chemicals.

For example even if the water companies started acting as custodians of the rivers several would still be screwed due to all the effluent from farms.

A £2,000,000 asset that can only generate £30,000 annual profit, after a great deal of hard work, is not worth £2,000,000.

it is if it was a useful vehicle for transferring wealth without IHT.

I see the royals were mentioned up there, I assume they are exempt from any of this…

In this study of 523 farmers, the overall Brexit voting behaviours were not significantly different from the general population. Cereal farmers voted to remain and dairy farmers voted to leave. Education, age and sex were all in line with national trends too . I would hesitate to say that there was a strong Leave intent and that farmers were little different to anyone else.The NUF was in favour of Remain too. Curb your stereotypes.

With regards to valuations, a 1.5% return on investment implies an overvaluation of approx 3x. Hardly anyone has mentioned in the media that falling land prices might benefit these asset rich farmers to mitigate their IHT liabilities. But by the next elections, with data in hand, IHT changes will be irrelevant. The removal of DC pension exemption will likely make far more tax revenue than agricultural IHT (note the TOTAL IHT receipts were £7.5bn – less than 1% of all revenue). See how that trends upwards over the next five years. Of course there is no perspective in the media!

It appears challenging to separate the agricultural land overvaluation from the fact it’s currently bought as a refuge from inheritance taxes. Beginning to address that distortion appears to be a good place to start on fixing that issue.

But the new tax dodgers like Clarkson are only the most obviously egregious in the tax breaks they expect, we don’t need special laws for them… all land owners should pay inheritance tax if their wealth (yes, land is wealth) is large enough. Because someone was born into land ownership, rather than bought into at after a long career earning money by means other than working the land, shouldn’t exclude their family from wealth taxes.

Since when is turning out to support a protest counted as trying to hijack it ?

Erm, when farmers say don’t turn these protests into a culture war, then shitheads like Clarkson start talking about immigrants. That’s a co-option. When climate change deniers start mobilising and calling into question science, when farmers are concerned merely about the payments from sustainability subsidies. There are other examples….

If we want to close a tax loophole where people buy a nominal but not really productive farm, but we also want to ensure farms aren’t closing due to this because we want to keep domestic food production, is there some way of closing the loophole by implementing inheritance tax partly based on the turnover of the farms? Presumably any decent sized arable, dairy or meat farm is going to have a pretty massive turnover even if they are not particularly profitable, whereas someone who just has a load of empty fields of grass to avoid tax won’t.

Or is that economically naive of me?

it is if it was a useful vehicle for transferring wealth without IHT.

But how is it transferring wealth?

Something is only worth what people are willing to pay for it.

If they are only earning a return on investment, after a load of hard work,  of 1.5%, then the land is totally over valued.

This whole farmland thing seems to defy any normal economic principles.

Or maybe the farmers aren’t as skint as they say they are?

I hope no one is looking at Zimbabwe as a way of redistributing the farms for the greater good….

none existent profits.

There are profits. If not what are these farmers living on, paying their domestic bills with like everyone else?

I suspect that a lot of the fuss is because land has become overpriced as investors and those looking to use it as a tax shelter have pushed up the price simply by increasing the competition for the land. I wonder how many of those complaining are not only unhappy with loosing the tax shelter but that this will lead to a drop in land prices and maybe a loss on their investment. The genuine farmers won’t care about the latter because they have no intention of ever selling it.

But how is it transferring wealth?

Land is wealth. Don’t let the likes of James Dyson persuade you that it isn’t.

As a socialist, environmental scientist and part of a farming family, the idea that farmers are successful “custodians of the land” is absolute nonsense. They absolutely trash the land – they compact soil, they trash biodiversity, they cause masses of erosion, they are the biggest source of eutrophication causing nutrients washing into watercourses, they’re a huge source of endocrine disruptors in watercourses, they ruin soil carbon stocks and damage soil’s ability to prevent floods and reduce the impact of droughts.

My family is perhaps a little unusual as the main family farm is only on its second generation of owners, and the others were bought by the current generation. None of them are poor, largely because farming isn’t the only thing they do, but they’re also very smart at the farming they do do, and could definitely afford the inheritance tax hit. But given that the Guardian article posted on page 1 points out that the law changes will only impact 500 farms, and they’ll have ten years to pay off the tax bill, it’s going to impact so few people it doesn’t matter.

To follow up TiRed’s post, my family are on the whole a massive bunch of anti-immigration gammons but even then half the ones owning farms and land didn’t vote for Brexit – on a personal level they approved, but knew it’d be bad business.

We also don’t really pay enough for food at the till in the UK – market forces need to change to make farming a more viable living without subsidies. But for now we have the subsidies, so we just pay for it from our taxes instead.

There is a perception that “all farmers” are rich, have new Range Rovers and their kids go to private schools. The fact is most farmers struggle to break even working 7 days a week and they have been screwed over by the supermarkets

Having done the accounts of many farmers over the years I can indeed confirm that they are not struggling at all. Or maybe it’s just sheep farmers here in the borders. Anecdotally, the cereal and vegetable farmers where I’m from in Lincolnshire are doing very well too.
.
.
Anyway, what really gets to me is the tax breaks and subsidies given to ****ing grouse moors, they should be the number one target over and above wealthy farmers who at least produce some food