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Government U turns on farmers IHT threshold
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Merry Christmas farmers
Government has raised the inheritance tax threshold limit from £1m to £2.5m after protests and warnings that family farms were at risk
First 250 acres or thereabouts free of inheritance tax |
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"Thankfully this has been tweaked but it does seem they have a problem with agricultural and rural lifestyles "
They're not alone ..
And it's not only the so called islington set/townies that do have a problem with some aspects ..
Obviously not all..
And tbh if anyone doesn't think that the shitty practice that puppy farming has become doesn't need stopping then they need to take a long look at what type of person they are.. |
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"Thankfully this has been tweaked but it does seem they have a problem with agricultural and rural lifestyles
They're not alone ..
And it's not only the so called islington set/townies that do have a problem with some aspects ..
Obviously not all..
And tbh if anyone doesn't think that the shitty practice that puppy farming has become doesn't need stopping then they need to take a long look at what type of person they are.."
I agree, the puppy farming and lobster change but it does feel like something is massively missing with the changes in animal welfare.
100% they hate the rural, probably isnt their voter target base. Maybe this was the plan all along to get it to 2.5mil and this is a planned U-turn to set it to 1mil and backtrack "after consultation"
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This change apparently means that the number of estates affected will drop from 375 to 185, so zero tax to pay for 190 families with assets up to £5 million (as married couples can combine their allowance).
I'm not sure why farmers should pay far less tax than anybody else. Can someone explain?
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"This change apparently means that the number of estates affected will drop from 375 to 185, so zero tax to pay for 190 families with assets up to £5 million (as married couples can combine their allowance).
I'm not sure why farmers should pay far less tax than anybody else. Can someone explain?
"
Because they are asset rich and cash poor often earning a return of barely 1% on the value of the land, they would have to sell off land to pay the tax.
Meaning less farmland and food security and prices being raised.
The government should've done this in the first place as lives have probably been lost and money spent in stratergising for the 1 million initial value. |
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"This change apparently means that the number of estates affected will drop from 375 to 185, so zero tax to pay for 190 families with assets up to £5 million (as married couples can combine their allowance).
I'm not sure why farmers should pay far less tax than anybody else. Can someone explain?
"
Where did these numbers come from
Apparently the UK has 192,000 to 216,000 farm holdings in total, with about half being under 50 acres.
Small family farms (under 100 hectares/200 acres) historically made up about two-thirds of all holdings.
Questioning the original treasury claims of those affecting, and the amended number quoted |
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"This change apparently means that the number of estates affected will drop from 375 to 185, so zero tax to pay for 190 families with assets up to £5 million (as married couples can combine their allowance).
I'm not sure why farmers should pay far less tax than anybody else. Can someone explain?
Because they are asset rich and cash poor often earning a return of barely 1% on the value of the land, they would have to sell off land to pay the tax.
Meaning less farmland and food security and prices being raised.
The government should've done this in the first place as lives have probably been lost and money spent in stratergising for the 1 million initial value."
Basic payments scheme went with Brexit (£192 acre pa)
Harry’s Farm on YouTube went through the seasons costings on Ra*eseed - net Yield 0.09 pence m2 |
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"Because they are asset rich and cash poor often earning a return of barely 1% on the value of the land, they would have to sell off land to pay the tax.
Meaning less farmland and food security and prices being raised.
The government should've done this in the first place as lives have probably been lost and money spent in stratergising for the 1 million initial value."
That doesn't really explain why farmers alone should get such a huge tax break.
Maybe you believe that tax should be based on ROI? So that any business owners making small profits but having assets worth millions should be exempt from inheritance tax?
Rather than selling off a farm it should be relatively simple to sell a share of a farm. If there are no takers then what we are talking about is some weird kind of socialism where the state is giving preferential treatment to people who own millions of pounds worth of assets.
This kind of skewed taxation likely makes farms attractive to people wanting to avoid inheritance tax who have no real interest in farming.
I know many right-wingers object in principle to inheritance tax and it would be more productive to argue about this in general rather than romanticise the farming industry.
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"Where did these numbers come from
Apparently the UK has 192,000 to 216,000 farm holdings in total, with about half being under 50 acres.
Small family farms (under 100 hectares/200 acres) historically made up about two-thirds of all holdings.
Questioning the original treasury claims of those affecting, and the amended number quoted"
The numbers were from today's article in the Guardian...
"Raising the threshold will mean fewer farms will be taxed. According to the government, the number of estates affected next year will be 185, down from 375."
I don't know whether these numbers are accurate which is why I used the word "apparently". |
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"
This kind of skewed taxation likely makes farms attractive to people wanting to avoid inheritance tax who have no real interest in farming.
"
It could make investing in small farms tax efficient. Here in Devon a 50 acre farm with dwelling and buildings £750k - £1.5m. Potentially tax free gains but only benefits those that inherit. |
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"It could make investing in small farms tax efficient. Here in Devon a 50 acre farm with dwelling and buildings £750k - £1.5m. Potentially tax free gains but only benefits those that inherit."
I've not done any research, so could be completely wrong, but I imagine there might be a fair number of "gentleman farmers" in their 60's and 70's looking to buy farms in order to pay less tax transferring wealth to their children. |
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By *I TwoCouple 19 weeks ago
near enough |
"This change apparently means that the number of estates affected will drop from 375 to 185, so zero tax to pay for 190 families with assets up to £5 million (as married couples can combine their allowance).
I'm not sure why farmers should pay far less tax than anybody else. Can someone explain?
"
You really need that explained ? Wow |
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By *I TwoCouple 19 weeks ago
near enough |
"It could make investing in small farms tax efficient. Here in Devon a 50 acre farm with dwelling and buildings £750k - £1.5m. Potentially tax free gains but only benefits those that inherit.
I've not done any research, so could be completely wrong, but I imagine there might be a fair number of "gentleman farmers" in their 60's and 70's looking to buy farms in order to pay less tax transferring wealth to their children."
And what exactly would these rich kids do with a farm inherited from daddy 🤷♂️ |
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"You really need that explained ? Wow"
Wow isn't an explanation.
"And what exactly would these rich kids do with a farm inherited from daddy 🤷♂️"
Presumably use them like other wealthly people treat property assets.
They might live there for a while, they might use it as security for a loan to make an investment or they might simply sell it to another wealthy person looking to avoid tax. |
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By *lfasoCouple 19 weeks ago
South East |
"You really need that explained ? Wow
Wow isn't an explanation.
And what exactly would these rich kids do with a farm inherited from daddy 🤷♂️
Presumably use them like other wealthly people treat property assets.
They might live there for a while, they might use it as security for a loan to make an investment or they might simply sell it to another wealthy person looking to avoid tax."
Capital Gains Tax is payable if farmland is sold for more than the original purchase price just like any other asset.
IHT relief is available to many trading businesses, not just farms. Encouraging a business to survive beyond one generation has always been seen as a positive thing for the economy.
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"Capital Gains Tax is payable if farmland is sold for more than the original purchase price just like any other asset."
CGT is (at maximum) 24% and for farmers 14% on the first £1 million.
And with an exemption threshold of £2.5 million for farmers.
Compared with 40% inheritance tax with an exemption threshold of £325k to £500k for regular folk.
"IHT relief is available to many trading businesses, not just farms. Encouraging a business to survive beyond one generation has always been seen as a positive thing for the economy."
AFAIK there are more restrictions on Business Relief than on farms but would be interested to learn more.
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And of course there's Private Residence Relief to consider - as you can avoid CGT on your place of residence. The interaction between PRR, APR and CGT is complicated but I get the impression that buying a farm is still an excellent way to reduce or avoid IHT.
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All very complicated.
The UK tax code is widely recognised as the longest in the world, estimated to be over 21,000 pages long, containing roughly 10 million words.
The Hong Kong tax code is 276 pages |
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"All very complicated.
The UK tax code is widely recognised as the longest in the world, estimated to be over 21,000 pages long, containing roughly 10 million words.
The Hong Kong tax code is 276 pages"
Tax rules need to have a certain amount of complexity to be effective but I think we can agree that the UK rules are way too complicated.
As an example, I recently did my online tax return and it took about an hour to complete even though I'd done all my accounting in advance and my financial affairs are not particularly complex.
The problem is that anyone even slightly negatively affected by tax changes complains loudly while those who might gain remain silent so there is no real incentive to simplify things. The goal becomes to sneak in minor measures that raise revenue hopefully without anyone noticing.
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"All very complicated.
The UK tax code is widely recognised as the longest in the world, estimated to be over 21,000 pages long, containing roughly 10 million words.
The Hong Kong tax code is 276 pages "
This!
Simplifying the tax system would go a long way. It's insane how even professional tax filing experts struggle to understand how capital gains taxes are calculated. |
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"All very complicated.
The UK tax code is widely recognised as the longest in the world, estimated to be over 21,000 pages long, containing roughly 10 million words.
The Hong Kong tax code is 276 pages "
 |
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"And of course there's Private Residence Relief to consider - as you can avoid CGT on your place of residence. The interaction between PRR, APR and CGT is complicated but I get the impression that buying a farm is still an excellent way to reduce or avoid IHT.
"
The Duke of Westminster inherited a £9bn property portfolio via some old trust HMRC couldn’t be bothered to challenge.
Tax is made as complicated as possible to catch as many as possible. |
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"And of course there's Private Residence Relief to consider - as you can avoid CGT on your place of residence. The interaction between PRR, APR and CGT is complicated but I get the impression that buying a farm is still an excellent way to reduce or avoid IHT.
"
Why is inherited farmland taxed... 'feeding the people nonsense' .. its a business.
Inherited houses are taxed and we don't claim to be ' housing the homeless,' …it’s a business |
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"And tbh if anyone doesn't think that the shitty practice that puppy farming has become doesn't need stopping then they need to take a long look at what type of person they are.."
Breeding animals to directly sell on for profit is not the same as breeding animals and growing crops for food/materials. |
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By *lfasoCouple 19 weeks ago
South East |
"And of course there's Private Residence Relief to consider - as you can avoid CGT on your place of residence. The interaction between PRR, APR and CGT is complicated but I get the impression that buying a farm is still an excellent way to reduce or avoid IHT.
"
It is only effective if the beneficiaries continue to own and farm the land; otherwise there is no benefit. Just as a family owned garage business can be passed on without paying IHT. ExampleTax is not avoided, merely deferred. Indeed as assets are revalued for CGT purposes on death, IHT would likely be lower than the eventual CGT. If, for example, the garage business were sold for housing. |
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"And of course there's Private Residence Relief to consider - as you can avoid CGT on your place of residence. The interaction between PRR, APR and CGT is complicated but I get the impression that buying a farm is still an excellent way to reduce or avoid IHT.
Why is inherited farmland taxed... 'feeding the people nonsense' .. its a business.
Inherited houses are taxed and we don't claim to be ' housing the homeless,' …it’s a business "
Most of the farmland around here is owned by charities, the biggest of the lot being the Church of England, which just so happens to also have one of the largest pension funds in the UK and one of the largest investment funds. No tax there then.
Meanwhile over in Lincolnshire one of the largest landowners is James Dyson who, with his Singapore domicile, doubtless pays next to no tax. |
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By *lfasoCouple 19 weeks ago
South East |
"And of course there's Private Residence Relief to consider - as you can avoid CGT on your place of residence. The interaction between PRR, APR and CGT is complicated but I get the impression that buying a farm is still an excellent way to reduce or avoid IHT.
Why is inherited farmland taxed... 'feeding the people nonsense' .. its a business.
Inherited houses are taxed and we don't claim to be ' housing the homeless,' …it’s a business
Most of the farmland around here is owned by charities, the biggest of the lot being the Church of England, which just so happens to also have one of the largest pension funds in the UK and one of the largest investment funds. No tax there then.
Meanwhile over in Lincolnshire one of the largest landowners is James Dyson who, with his Singapore domicile, doubtless pays next to no tax. "
Living in Singapore will not affect his UK tax liability one iota. |
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"It is only effective if the beneficiaries continue to own and farm the land; otherwise there is no benefit. Just as a family owned garage business can be passed on without paying IHT. ExampleTax is not avoided, merely deferred. Indeed as assets are revalued for CGT purposes on death, IHT would likely be lower than the eventual CGT. If, for example, the garage business were sold for housing."
Say I had a house worth £2 million and wanted my son to inherit it on my unexpected death then I think he'd get a £500k tax fee allowance and would have to pay 40% IHT or £600k.
On the other hand if I had a farm worth £2 million he would pay no IHT.
If he wanted to immediately convert the farm to cash I think he'd pay 14% CGT on the first £1 million (£140k) and 24% on the second £1 million (£240k) - so £380k in CGT at most - a saving of £220k.
But if he lived there for a while I think PRR would reduce the CGT. I'm not sure by how much but presumably PRR still applies to a percentage of a mixed use property.
Let's say I didn't own a farm so I'd have to buy one so there'd be SDLT to pay of nearly £90k but overall there's still be a saving of £130k in tax.
If my farm was worth say £10 million then anything above £2.5 million would result in an IHT rate of 20% instead of 40% so a saving of £1.5 million in tax.
I'll take your word for it that these tax breaks apply to someone owning a garage business but the same thinking applies. Presumably people could buy a garage business in order to save enormous amounts on tax too.
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All these arguments just show why inheritance tax is a terrible idea to begin with. It only helps the big businesses who want to establish a monopoly by forcing the small businesses to sell their property to the big businesses, in order to pay the tax. |
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"All these arguments just show why inheritance tax is a terrible idea to begin with. It only helps the big businesses who want to establish a monopoly by forcing the small businesses to sell their property to the big businesses, in order to pay the tax."
Inheritance tax receipts for 2024 to 2025 financial year reached a record £8.2 billion
£5bn of that spent on small boat arrivals. Welfare state another £330bn. HMRC can’t keep up, that’s why we are in £3tn debt
Uk haemorrhaging tax payers money instead of investing it - specifically farming - EU basic payments scheme gone with Brexit, importing half our food, Unilever et all lobbying govt to keep selling their ultra processed foods keeping nearly half the country overweight/obese living off crap diets costing NHS billions a year in treatments. Allotments to be sold off by Labour for housing |
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"Merry Christmas farmers
Government has raised the inheritance tax threshold limit from £1m to £2.5m after protests and warnings that family farms were at risk
First 250 acres or thereabouts free of inheritance tax "
I wonder what behind this sudden U turn. They did not listen before the policy went ahead or after so what's changed their mind. Is it really the farmers protesting or is it Starmer desperately needs a good news story. Shame he and his government did not want to listen beforehand |
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"Merry Christmas farmers
Government has raised the inheritance tax threshold limit from £1m to £2.5m after protests and warnings that family farms were at risk
First 250 acres or thereabouts free of inheritance tax
I wonder what behind this sudden U turn. They did not listen before the policy went ahead or after so what's changed their mind. Is it really the farmers protesting or is it Starmer desperately needs a good news story. Shame he and his government did not want to listen beforehand "
They have made a number of low yielding tax raids which has upset various groups and impacted significantly on public opinion of Labour
Pensioners winter fuel was to raise £1.7bn before U turn
Farmers iht grab was to raise £520M, now U turn it will probably a third of that. A lot of protests and three confirmed farmers suicides
Welfare cuts were to raise £5bn before u turn
Zem next, eu reportedly delaying to 2040
Small boats not stopped
Gangs not smashed
House building targets not met
Sunak was clearly right all along about tax rises
Think they’ve run out of ammo now. |
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By *lfasoCouple 19 weeks ago
South East |
"It is only effective if the beneficiaries continue to own and farm the land; otherwise there is no benefit. Just as a family owned garage business can be passed on without paying IHT. ExampleTax is not avoided, merely deferred. Indeed as assets are revalued for CGT purposes on death, IHT would likely be lower than the eventual CGT. If, for example, the garage business were sold for housing.
Say I had a house worth £2 million and wanted my son to inherit it on my unexpected death then I think he'd get a £500k tax fee allowance and would have to pay 40% IHT or £600k.
On the other hand if I had a farm worth £2 million he would pay no IHT.
If he wanted to immediately convert the farm to cash I think he'd pay 14% CGT on the first £1 million (£140k) and 24% on the second £1 million (£240k) - so £380k in CGT at most - a saving of £220k.
But if he lived there for a while I think PRR would reduce the CGT. I'm not sure by how much but presumably PRR still applies to a percentage of a mixed use property.
Let's say I didn't own a farm so I'd have to buy one so there'd be SDLT to pay of nearly £90k but overall there's still be a saving of £130k in tax.
If my farm was worth say £10 million then anything above £2.5 million would result in an IHT rate of 20% instead of 40% so a saving of £1.5 million in tax.
I'll take your word for it that these tax breaks apply to someone owning a garage business but the same thinking applies. Presumably people could buy a garage business in order to save enormous amounts on tax too.
"
Well let’s hope you don’t die suddenly, but instead sold your house for 2 million with no CGT to pay, give most to your son with no IHT to pay. 2 million tax free, whereas whenever the business (or farm) is sold there will be a CHT liability as a reward for building a business over several generations. You, the non business owner would pay 100% less tax than the farmer or garage owner. |
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"It is only effective if the beneficiaries continue to own and farm the land; otherwise there is no benefit. Just as a family owned garage business can be passed on without paying IHT. ExampleTax is not avoided, merely deferred. Indeed as assets are revalued for CGT purposes on death, IHT would likely be lower than the eventual CGT. If, for example, the garage business were sold for housing.
Say I had a house worth £2 million and wanted my son to inherit it on my unexpected death then I think he'd get a £500k tax fee allowance and would have to pay 40% IHT or £600k.
On the other hand if I had a farm worth £2 million he would pay no IHT.
If he wanted to immediately convert the farm to cash I think he'd pay 14% CGT on the first £1 million (£140k) and 24% on the second £1 million (£240k) - so £380k in CGT at most - a saving of £220k.
But if he lived there for a while I think PRR would reduce the CGT. I'm not sure by how much but presumably PRR still applies to a percentage of a mixed use property.
Let's say I didn't own a farm so I'd have to buy one so there'd be SDLT to pay of nearly £90k but overall there's still be a saving of £130k in tax.
If my farm was worth say £10 million then anything above £2.5 million would result in an IHT rate of 20% instead of 40% so a saving of £1.5 million in tax.
I'll take your word for it that these tax breaks apply to someone owning a garage business but the same thinking applies. Presumably people could buy a garage business in order to save enormous amounts on tax too.
Well let’s hope you don’t die suddenly, but instead sold your house for 2 million with no CGT to pay, give most to your son with no IHT to pay. 2 million tax free, whereas whenever the business (or farm) is sold there will be a CHT liability as a reward for building a business over several generations. You, the non business owner would pay 100% less tax than the farmer or garage owner. "
Small businesses are not automatically exempt from Inheritance Tax (IHT). Instead, they may qualify for a valuable relief known as Business Relief (formerly Business Property Relief), which can reduce the value of the business for IHT purposes by 50% or even 100%.
However, claiming this relief depends on meeting specific criteria, and new rules are being introduced from April 2026 that will cap the available relief.
So why the difference across diferant industry's farming almost free anything else lose 50% + |
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