-
Doesn’t that overlook the farming of rented land, not all farms are owner farmed.
I did see but can’t find maybe the OBR(?) or similar support the Government statements.
Theres also something slightly amiss in the idea that one landowner single handedly farms their land passing it down only once they die to one successor.
GoatandTricycle-
Yeah, I think one of the things is the government has pointed to Paul Johnson from the IFS who have backed their position. There's no shortage of economists and academics backing the government on this. This is appealing to authority, though. In other words; "look, this authority figure agrees with me so I'm right", rather than actually offering any supporting evidence.
However, farming is a strange business. There's lots of peculiarities. I myself am definitely not an expert. I'm just interested as I've known quite a few farmers over the years and have lived rurally for most of my life. The huge majority of people (myself included) just wouldn't go into farming because it doesn't make much sense to do so. You've got to really love farming, or see yourself as having no other feasible choices.
As such, the real experts are people like agricultural land valuers, land agents, or agricultural economists. Why are they not being listened to?
I just did a quick search and apparently 14% of farms in the UK are tenanted, and 31% are mixed tenure. I don't know what mixed tenure means in this context. Some forms of tenancy will allow passing down the tenancy to an hier. For example my mother's former partner rented the farm off the local council and was able to pass it down through the generations.
What do you think is amiss about the idea of one farmer single handedly farmings and then passing it down once they die to one successor?
That scenario is definitely not typical. Farming is hard, but farmers tend to do it until they're old because most won't have built up much of a pension. If they gift the farm to their heir more than 7y before they die then there's no IHT to pay, but certainly sometimes the parent will die before the 7 years have passed. As it's a hard job, sometimes farmer has a heart attack while farming and so the estate will pass down unexpectedly early.
hazzelfrazzel
The BBC Verify article about farming IHT tax is okay, but it just explains where the different figures come from.
I think the critical thing is that many experts in the area are saying the government has got their figures wrong when they calculated the impact this will have. They used the figures for agricultural property relief (APR), and not for business property relief (BPR). They're then saying "only x% of farms would be impacted", ignoring the fact that APR claims =/= farms. If I were a farmer who died, APR covers my land and buildings. However, machinery, livestock, deadstock, and diversified activities fall under BPR.
Looking at the APR figures here, 59% of APR claims in '21-'22 were for less than £250k. There isn't a food-producing farm in the country that is worth less than £250k for the land and buildings. Those are clearly not farms. They're just parcels of land with potentially a barn on them.
So the government has made a mistake in the figures they used to work out how to achieve their stated aim of taxing the most wealthy farmers. However, when experts have pointed this out to them, the ministers (i.e. non-experts, like myself) have just doubled down, rather than going "oh okay, tell me more about this and let's have another look just in case we did get it wrong".
Example article that I think sums up the issues fairly concisely: https://www.caav.org.uk/news/jeremys-blog-15th-november-2024-budget-confusion-and-challenges
Note I'm not advocating that things should have stayed the way they were. I think the government needs to listen to the experts and go back to have another look at their data and the threshold they set.