-
taxing something makes it less affordable
new tax
IHT is not new or additional – they have been exempt. This is a duty levied on personal wealth, and not a regular tax on operating profit for a farming business.
For the business this really is just another risk which can be managed and mitigated.
For the individual ... I believe in fair taxation and the concept that sometimes a tax pound spent on someones behalf can often return greater value for the individual than a pound in their pocket. Why wealthy farmers were ever exempt from IHT baffles me.
Your hypothetical narrative talks about businesses close to unviability in the round but it's probably more useful to look at who would actually have enough hoarded personal wealth through farming to be liable to meet the IHT threshold.
From data I've seen doing the rounds I'm assuming it's unlikely to be anyone without a significant buffer for their personal and business finances, even if assets need to be liquidated to meet the IHT.
So yeah, I stand by my point that if farming businesses are so close to the edge they can't weather the impacts of IHT, then they certainly could not navigate the financial shock from other risks and are therefore unviable. That is mismanaged wealth.
🅑🅐🅣🅣-
it's probably more useful to look at who would actually have enough hoarded personal wealth through farming to be liable to meet the IHT threshold.
The whole point is that there are some farms that will reach that threshold through the value of the land and machinery, but still aren't very profitable. Portraying that as "hoarded wealth" is deeply odd. But then you get round that by saying that if they can't afford the IHT then it's "mismanaged wealth" in which case they deserve to go under. Either way it's nasty, horrid, unfair, distasteful wealth (eurgh!) that's either hoarded (yuck!) or mismanaged (boo!) rather than, say, an asset that is difficult to make profit from and currently overvalued, but from which we benefit if it keeps running with some sort of continuity.
So yeah, I stand by my point that if farming businesses are so close to the edge they can't weather the impacts of IHT, then they certainly could not navigate the financial shock from other risks and are therefore unviable.
So the answer is to make them face both? The plan is to impose the certainty of IHT and then face all those other risks as well, and then blame them for not being able to weather both?
And none of this engages with the question what we actually want to happen in this sector? Do we want to make it harder to run a financially viable family-owned farm? Is that a sector that we want to shrink? If not, why are we doing this; if yes, why?
ffm
I don't understand this logic. People's brains seem to just break when discussing this. Placing an additional tax burden on anything makes it harder to afford doing that thing. That reduces the number of entities that can afford doing that thing. Saying "well they were sailing too close to the wind anyway" doesn't change the fact that it's the new tax that's pushed them over the edge nor the fact that many businesses that weren't sailing close to the wind (in terms of the next flood, blight, accident etc.) now will be because they're also bearing a greater tax burden.
Can we at least agree that taxing something makes it less affordable?