Quizzes & Puzzles1 min ago
Multi-Million/Billionaires Owning Farms
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I used to wonder why so many super-wealthy individuals (such as James Dyson) and a number of rock/pop stars/celebrities developed an interest in farming (in the UK) once they had loads of cash to spare.
For instance, Dyson owns around 36,000 acres of farmland, reportedly worth over half a billion pounds. I wonder how often he travels from Singapore to oversee this operation, given his interest in being a farmer.
I was unaware that the reason these super-rich individuals invest in farms; is that there is zero inheritance tax on the investment – even a 20% tax rate over £1 million still looks an attractive option – but not to farmers.
Watch Clarkson berate the BBC (Victoria Derbyshire) for suggesting he purchased his farm to avoid inheritance tax (classic BBC, as Clarkson points out).
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I agree with sandyRoe @ 09.44 .Squeeze every last penny out of these tax dodging Tory supporting farmers.
Farms are exempt because they have a special place in the nation, they provide the food. They are passed down tax free because as we see here they will be disolved as a business in 4 generations. Unfortunately the rich have been using this as a way to avoid IHT so the government are trying to stop that. If the governement wants to stop the rich buying land to avoid IHT then great but this is throwing the baby out with the bath water. As usual with this government and the tea leaf they have acted without analysing the effect.
The problem is we have the worst chancellor in history thrashing about like a kid on a bouncy castle with no real idea what she is doing:
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Hymie, as far as I'm aware rules relating to inheritance tax regarding business vary and are quite complex and I'm not an expert. What I do know, however, is that farms not only provide a living for farmers, they are his home and his family's whole life. Farmers not only feed the nation, they manage and care for the countryside, and in that they are unique. They're the people who cut the hedgerows, keep the roads clear of snow and usable and clear the ditches - no mains drainage where I live so that is essential to combat flooding. This tax has been imposed by people who know nothing of the countryside and nothing of farming - even if Mr Starmer did see a cow once or twice in his youth. It is wholly destructive, it's borne of Labour greed and political spite, and nothing good can come of it. If they kill the farming industry then what? Think about it.
“But the value of the flat significantly exceeded the zero IHT threshold, such that his family had to sell the flat to pay the IHT.
Why should farmers be exempted from IHT, when the family above had to pay it at a 40% rate?”
You completely and utterly fail to grasp the issue here.
In the case you cite, none of the beneficiaries were living in the flat; none of them relied on it for their business and income. Family farmers are effected in both these respects when they are expected to pay tax on the value of an asset that is to continue being used as it was before the death of the owner.
I happen to believe that IHT should be abandoned entirely, but that’s a discussion for another day. But whilst it exists there is no justification for imposing it on the value of assets that are not to be sold. As I have said in earlier threads, Capital Gains Tax will capture income from the profits on such items.
“Naomi – If someone owns a family run business which is the family’s livelihood (no business, no work, no income); why do they pay inheritance tax (just because the business is not a farm)?”
They shouldn’t (see above). And the way to address that anomaly is to make such transfers of assets free of IHT, not to impose it on those who currently don’t pay it. Governments should be looking for ways to allow people to keep more of their own money, not to seek ways of appropriating more of it.
“and why does that give them exemption for IHT?”
Because it makes sense to encourage families to continue farming rather than force them to sell either some or all of their farm to pay a levy imposed just because a member of their family has died.
The problem is that you, in common with the Labour government, see no distinction between a family farm run by people who gain comparatively little income from it and James Dyson, who has found a perfectly legitimate way to shelter some of his wealth from confiscation. Despite these new measures, people like him will continue to take advantage of the IHT concession afforded to farm owners because it is still good value (at 20% instead of 40%). But a small farmer, whose farm probably makes less than £100k a year, could face a bill of many times that total annual income which must be paid for no other reason than his father has died. Ironically, if some or all of the family farm has to be sold, it is people like James Dyson who are likely to buy it.
It is said the Chancellor has taken a sledgehammer to crack a nut. That is no correct. She has taken a toffee hammer to break open a coconut. Her hammer will smash a few peanut shells (the family farmers) but will leave the coconuts (multi-millionaires) just slightly dented.
Farmers feed the nation, they only in it to look after us all, give me a break! Landowners throughout history have only ever been in it for themselves and nothings changed, I would love to know my children would inherit my house free and clear of taxes, but if there's one of us left and go into care then after care fees they would actually inherit very little, soon as the millionaires have to pay all hell breaks loose. Screw the one's with very little as usual, well done Kier.
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