No industrial scale farmers pleading poverty while rolling in subsidies and tax perks; no mad cow disease, no nitrates in rivers, no chickens pumped full of steroids, no tearing down hedgerows and destroying biodiversity
https://www.sustainweb.org/blogs/nov24-farming-budget-inheritance-tax-apr/
Away from the shrill hysteria and undoubted politicising of a subject that needs some discussion, the linked article is worth a read, some quotes below that I thought relevant.
“Nothing is certain in life except death and taxes,” the saying goes. Yet, until now, the latter hasn’t applied as strongly to many landowners. In the Autumn Budget, the Chancellor introduced major changes to the tax landscape that will reshape how agricultural land and businesses are passed down through generations.
These changes have sparked considerable anger within the farming community, quickly turning the issue into a political flashpoint.
While some are opportunistically using farmers’ frustrations to score political points, not always based on facts, this heightened focus on farming is also shining a light on the deeper-rooted issues within a much-beleaguered sector.
The new rules introduce a threshold: combined agricultural and business property assets up to £1 million will still receive 100% relief, but anything above that will be
taxed at an effective rate of 20%, payable over ten years interest-free.
However, there are notable caveats: farmers may avoid the tax by transferring property at least seven years before death. Many will also be able to take advantage standard household tax allowances if the farm is owned by a couple,
potentially pushing up amount they can pass on tax free to £3 million.
The tax-free allowances will vary depending across farms, and given the historically high value of agricultural land, machinery, and buildings, many farm businesses will now need to prepare for inheritance tax in ways that were previously unnecessary.
The rationale behind the changes is clear: f
or decades, farmland has served as a tax shelter for the wealthy. Introduced in 1992, the inheritance tax exemption for farmland allowed multi-millionaires, and in some cases billionaires, to avoid significant tax liabilities. Economist Tim Leunig pointed out that farmland became "the best way to leave £100 million to your kids," exacerbating wealth inequality and inflating land prices in the process.
These inflated prices have made it difficult for new farmers to enter the industry, for tenant farmers to purchase the land they work, and for communities to buy land when it comes up for sale. In this sense, the uncapped relief has been detrimental to farming. Labour’s introduction of a cap aims to close this loophole and prevent land from being a convenient tax dodge for the ultra-rich.
The government’s intention is to target wealthy landowners who use the system to avoid tax. But the policy is arguably too crude and risks ensnaring many family farms—the very farms politicians claim to support
. A calm assessment is needed around where real unfairness is being introduced and technical fixes are needed.
The decline in full-time agricultural workers is stark, with a 4.6% decrease in 2023 alone. The financial, physical, and mental toll of farming is driving people out of the profession and discouraging new entrants from taking it up.
Supermarkets and large agribusinesses are squeezing every last drop out of the food supply chain, leaving minuscule margins for farmers. This is a deeply unfair and extractive system. A fairer and more effective approach would be to start by taxing and regulating the bigger players in the supply chain, where the real profits are made.
As farmers’ frustration mounts over the new inheritance tax rules, it's crucial for the government to consider the deeper reasons fuelling this response from a sector that has endured years of what has amounted to managed decline.
With farming in the political spotlight, there’s a window of opportunity to rethink a range of policies. "
