How do Labour's inheritance tax policies support sustainable agriculture in Britain?

[Serial_Apologist]

Anyone, like myself, feeling conflicted over today's farmers' demonstration outside Parliament, may find the following, I think, well argued article useful:

http://labourheartlands.com/the-great-british-farm-betrayal/

[Old Grumpy]

I was led to this article via another website. I find James Rebanks' writing very good:

https://unherd.com/2024/11/a-farmers-revolt-is-coming/

[Ian Thumwood]

I was surprised surprised how little profit farms are alleged to make. However the issue of rural poverty needs to be addressed. The issue of inheritance tax on farms most not be taken out of context with the greedy supermarkets who are now complaining about additional NI and the increase in the minimum wage as diminishing their profits when they are constantly screwing down the price for farm produce.

I do not have much sympathy for the rich who constantly complain about loss of income. I am not too sympathetic towards farmers given the subsidies they have enjoyed in the past. I am sure that many of the people in the countryside voted for Brexit and I just feel that the more Right wing communities are moaning as they are having to pull their weight towards the economy for once.

I think the ultimate solution will be for farms to be nationalised and serious attention to be given to produce economically viable farms and where workers on the farms get a wage commensurate with their worth. Also worth adding just how much pollution and contamination private farm's are responsible for. Who is going to pay for the environmental damage they have caused.

Squeeze them until the pips squeak and then put the farm's into public ownership. Once this is done, the government then can address the supermarkets.

[Frances_iom]

...

Squeeze them until the pips squeak and then put the farm's into public ownership. Once this is done, the government then can address the supermarkets.

worked well in Ukraine in the 1930s

[mikealdren]

The problem with this is the government's record on running anything including themselves.

[Serial_Apologist]

I was led to this article via another website. I find James Rebanks' writing very good:

https://unherd.com/2024/11/a-farmers-revolt-is-coming/

Yes, thanks for what is another excellent article. Shame that so many of the comments below miss its central points, and that anticipating the usual huntin' and shootin' brigade-associated replies was high in my scepticism regarding actual reasons motivating today's demo.

[Serial_Apologist]

The problem with this is the government's record on running anything including themselves.

That postwar Fabian top-down command model of nationalisation with its fidelity to unsustainable market desiderata and unaccountable boards of directors to match did more to discredit state ownership in the public mind and bring back the monetarist credo of survival of the shittest under the rubric of "efficiency" than anything else.

[oddoneout]

Something I hadn't realised is that farms have been able to claim two tax reliefs - one on the land(agricultural property relief) and one on the farm business(business property relief - as is also available to non-farm businesses), but that the new rules remove that separation. By adding together the value of the farm property and the business assets for the tax assessment the £1million threshold will affect far more farms than previously. More here https://www.theguardian.com/environm...ing-uk-farmers
What concerns me is that I don't see that it will solve the issues caused by the mega-corp agriculture model, as inheritance tax isn't an issue for such businesses. It doesn't solve the issues of the grouse moors and shooting estates either. So on that front it don't see it helping with sustainability, pollution control etc.
It's all very well saying that the burden of tax should fall on the broadest shoulders but then not addressing the cases when it does the opposite - and leaves the broadest shoulders unloaded as this seems to do.

[Serial_Apologist]

Something I hadn't realised is that farms have been able to claim two tax reliefs - one on the land(agricultural property relief) and one on the farm business(business property relief - as is also available to non-farm businesses), but that the new rules remove that separation. By adding together the value of the farm property and the business assets for the tax assessment the £1million threshold will affect far more farms than previously. More here https://www.theguardian.com/environm...ing-uk-farmers
What concerns me is that I don't see that it will solve the issues caused by the mega-corp agriculture model, as inheritance tax isn't an issue for such businesses. It doesn't solve the issues of the grouse moors and shooting estates either. So on that front it don't see it helping with sustainability, pollution control etc.
It's all very well saying that the burden of tax should fall on the broadest shoulders but then not addressing the cases when it does the opposite - and leaves the broadest shoulders unloaded as this seems to do.

Indeed so. And I hadn't realised that about the lumping together of property values and business assets either.

[french frank]

The Labour article quotes the figure of 70,000 farms affected. Other tax experts agree it's much closer to 500 which is the government's estimate. BBC Verify has analysed it (though it's not made clear whether agricultural earnings relate to what the farm owner earns and also the farm worker who is an employee:

https://www.bbc.co.uk/news/videos/c05z2g3326go

A CIF by Guy Singh-Watson who started the Riverford farms, became a millionaire and sold off the flourishing farm business to his employees, takes a different view:

https://www.theguardian.com/commentisfree/2024/nov/08/farmer-glad-tax-loopholes-investor-landowners-inheritance

[smittims]

For once I am pleased to agree with Ian Thumwood!

This is of course a very divisive matter, and like the fox-hunting ban earlier this century it reveals how right-wing (i.e. automatically anti-Labour) most landowners are. I know from experience that many wealthy people have pretended to be farmers , buying land to get tax relief. Many of them have 'never had it so good'. Well, now it's crunch time.

I know it's hard for some others , as it is for those who have to forego their winter fuel payment , but , although I'm not a Labour party supporter, I agree strongly with their rigorous fnancial policy. It's our last chance to get to grips with a situation which has been allowed to worsen by the two preceding administrations. Many essential services such as maternity care, mental health and children with special needs , have been starved of funding. We need to think of long-term improvement to build a robust economy to withstand the problems which will affect the world in the coming years. .

I've no doubt some provision will be found for genuinely poor farmers who cannot pay the tax. And I don't think they are nearly so many as the protests suggest. I think a lot of the protestors are jumping on the bandwaggon of the right-wing media who have waged a relentless and unreasoned attack on the new government from day one .

[Ein Heldenleben]

The Labour article quotes the figure of 70,000 farms affected. Other tax experts agree it's much closer to 500 which is the government's estimate. BBC Verify has analysed it (though it's not made clear whether agricultural earnings relate to what the farm owner earns and also the farm worker who is an employee:

https://www.bbc.co.uk/news/videos/c05z2g3326go

A CIF by Guy Singh-Watson who started the Riverford farms, became a millionaire and sold off the flourishing farm business to his employees, takes a different view:
https://www.theguardian.com/commenti...rs-inheritance

That’s Guy Singh -Watson is pretty well bang on the money. French farmers not only pay Inheritance tax they also split the farm 50 % spouse , equal division between children. That means a vast stake of the French population have a stake in farming . Their produce is , with the exception of lamb and a few other niche products , better quality than we produce and they are self sufficient. It’s also more expensive thing that’s largely a reflection of the exchange rate . As a proportion of income it’s probably cheaper .
When I first came to the South West , in the days when IHT was payable on agricultural land , land was £1000 an acre now it’s £10,000 at least . It’s impossible for a young farmer to break in. Not only that but the county councils have largely sold off their tenanted farms. The Duchy and NT a still have plenty of tenants but aside from them it’s a pretty bleak prospect from some one wanting to get it into the industry.
One consequence of this might be land values falling - making even fewer farms paying IHT.

[oddoneout]

That’s Guy Singh -Watson is pretty well bang on the money. French farmers not only pay Inheritance tax they also split the farm 50 % spouse , equal division between children. That means a vast stake of the French population have a stake in farming . Their produce is , with the exception of lamb and a few other niche products , better quality than we produce and they are self sufficient. It’s also more expensive thing that’s largely a reflection of the exchange rate . As a proportion of income it’s probably cheaper .
When I first came to the South West , in the days when IHT was payable on agricultural land , land was £1000 an acre now it’s £10,000 at least . It’s impossible for a young farmer to break in. Not only that but the county councils have largely sold off their tenanted farms. The Duchy and NT a still have plenty of tenants but aside from them it’s a pretty bleak prospect from some one wanting to get it into the industry.
One consequence of this might be land values falling - making even fewer farms paying IHT.

The French inheritance arrangements are forced heirship so a surviving spouse cannot inherit the entire holding if there are children. It ensures uniform distribution of the assets(within that hierarchy) but takes no account of whether such land is wanted or needed by the recipient. Whether buyouts or leasing arrangements are either possible or common I don't know, but the system of splitting land on death has consequences over time - basically the creation of lots of small scattered plots that cannot form a viable single holding. Squabbling between heirs, perhaps over many years, doesn't help anyone trying to buy such plots, many of which subsequently just get abandoned. It is a contributory factor to the rural depopulation seen in many areas of Europe.
Ironically the introduction in this country of tax relief on agricultural land in 1992 was intended to protect family farms, support food security and keep people on the land. That helped to reduce the impact of rising land prices for some as they could inherit land rather than having to buy, and unencumbered by tax debt. Although the new rates are less than other IHT rates and the debt can be paid over 10 years, that isn't much help where annual profits are very small, as they often are on family farms, and when taking into account the changes in the business relief element as well.
Farms that are owned by investment companies(eg for pension funds) will be tenanted, and they probably make up a fair part of the third of all farmland that is managed by tenant farmers in England. That can provide a way into farming for new entrants - the TV series 'This Farming Life' has included several such.

[smittims]

I hope the Chancellor reads your post of yesterday evening, oddoneout,and introduces a new tax for grouse moors etc.!

[oddoneout]

I hope the Chancellor reads your post of yesterday evening, oddoneout,and introduces a new tax for grouse moors etc.!

Hah! I would settle for such estates not getting tax reliefs and subsidies to wreak their destruction on vast swathes of land - actually taxing them is fantasy land I think. There are a good few foreign interests, not just the perceived aristos, and all will have the resources to "mitigate" any such tax arrangements as might be introduced.