Cycling UK Forum

Nearholmer wrote: 4 Nov 2024, 9:56am Slightly off at a tangent, but something I didn’t understand at the time, and have become increasingly baffled by, is what farmers thought/think brexit would/will do for them. There’s a sort of meme abroad the somehow farming “hasn’t been treated right” post-Brexit, that it hasn’t got out of it what was promised.

Can anyone explain this to me? Is there more to it than another group favouring Brexit because their mental image of the pig in the poke was one that benefitted them, only to discover when the poke was opened that it contained something else entirely? Or, was there some explicit promise to the benefit of farmers?

I think that you've got the two main contributors.

Many farmers never feel that they've been treated fairly. And it's a very easy story for media to present: family business, traditions and nostalgia, nationalism and food security. And some very rich owners of farms seem to have a lot of influence on a couple of newspapers.

And the campaign to Leave did include a fair amount of unicornery. And the negotiations were run incompetently.

The actual effects are well documented in the Supply Chains thread:
viewtopic.php?t=147877

But we are where we are. There are massive problems facing farming. And the government doesn't seem willing to work on removing the new trade barriers.

Jonathan

Why the IHT change should be good for small farmers

https://timleunig.substack.com/p/how-to ... amily-farm

roubaixtuesday wrote: 4 Nov 2024, 11:14am Why the IHT change should be good for small farmers

https://timleunig.substack.com/p/how-to ... amily-farm

This blogger says give the farm to the next generation to avoud IHT if you live 7 years afterwards. I thought you could only give away £3000 per tax year. Can you really transfer the whole farm business over to avoud IHT like that?

Tangled Metal wrote: 4 Nov 2024, 11:52am

roubaixtuesday wrote: 4 Nov 2024, 11:14am Why the IHT change should be good for small farmers

https://timleunig.substack.com/p/how-to ... amily-farm

This blogger says give the farm to the next generation to avoud IHT if you live 7 years afterwards. I thought you could only give away £3000 per tax year. Can you really transfer the whole farm business over to avoud IHT like that?

AIUI there is no IHT on gifts more than 7 years into the past at death.

But I'm not a tax expert.

Tangled Metal wrote: 4 Nov 2024, 11:52am

roubaixtuesday wrote: 4 Nov 2024, 11:14am Why the IHT change should be good for small farmers

https://timleunig.substack.com/p/how-to ... amily-farm

This blogger says give the farm to the next generation to avoud IHT if you live 7 years afterwards. I thought you could only give away £3000 per tax year. Can you really transfer the whole farm business over to avoud IHT like that?

For personal estate that's right on the 7 year rule. ("The whole farm business" might or might not fall into personal estate.)

But of course there are other rules. Most of them give further exemptions and reduce tax liability, but trusts might work the other way.

The £3,000 figure probably comes from the threshold for taxes on gifts, the "annual exemption".

"How Inheritance Tax works: thresholds, rules and allowances":
https://www.gov.uk/inheritance-tax/gifts

Jonathan

My concern is that cash to pay for IHT may not be there. I know from friends that money comes in at certain times of year, when your crops are ready. If you are a month or so before the next crop you can be really counting the pennies. Add in that the kids might only be paid or rather take a salary of say £25k and are possibly living in out of the way places that makes the cost of living more expensive too. I see from people I know that farming is not a job for family farm owners and their kids who are part of it, but a kind of vocation.

I read somewhere that it is not a big burden because they can pay it over 10 years. Nice of Labour government that is. In the same article it said interest is charged at 9%. Oh, not as nice as it sounded then.

I am not surprised by anything any of our governments do these days. It is clear to me for decades that all governments help those that are more likely to vote for them and hit those that are less likely to vote for them. The corruption of democracy in the western world. It is only Labour's turn to do it. Why are people surprised and getting upset by it? It is the great game of political power. I think it will stay like that until true consensus politics hit our form of democracy. PR or other system where there are no majorities unless you have a lot of smaller parties joining in with powers in coalition. We should never have a system where power switches between just two parties.

I think if people want to get upset at politics being unjust after this budget, the right thing to be upset about would be that the 2 child rule for benefits remains in place.

Children thrown into abject poverty in a futile attempt to punish the decisions of their parents, and a Labour government not changing this injustice.

Tangled Metal wrote: 4 Nov 2024, 12:11pm My concern is that cash to pay for IHT may not be there. I know from friends that money comes in at certain times of year, when your crops are ready. If you are a month or so before the next crop you can be really counting the pennies. Add in that the kids might only be paid or rather take a salary of say £25k and are possibly living in out of the way places that makes the cost of living more expensive too. I see from people I know that farming is not a job for family farm owners and their kids who are part of it, but a kind of vocation.
...

That implies that it isn't possible to plan. But it is. If you choose to keep the assets as personal estate until you die then inheritance tax is payable. But many other options are available. As is professional advice.

Jonathan

roubaixtuesday wrote: 4 Nov 2024, 12:15pm I think if people want to get upset at politics being unjust after this budget, the right thing to be upset about would be that the 2 child rule for benefits remains in place.

Children thrown into abject poverty in a futile attempt to punish the decisions of their parents, and a Labour government not changing this injustice.

Yes

Jonathan

roubaixtuesday wrote: 4 Nov 2024, 11:56am

Tangled Metal wrote: 4 Nov 2024, 11:52am

roubaixtuesday wrote: 4 Nov 2024, 11:14am Why the IHT change should be good for small farmers

https://timleunig.substack.com/p/how-to ... amily-farm

This blogger says give the farm to the next generation to avoud IHT if you live 7 years afterwards. I thought you could only give away £3000 per tax year. Can you really transfer the whole farm business over to avoud IHT like that?

AIUI there is no IHT on gifts more than 7 years into the past at death.

But I'm not a tax expert.

My point is that I thought there is a limit on what you can give away the cash gift it is £3k per year with 7 years of life after gift was made. not enough for a £2.65m farm really is it?

I know with houses it is possible to take advantage of the £300k or so allowance when say one parent dies leaving half the property value to the child. Then IIRC the surviving parent lives 7 years and then can leave another £300k or so allowance when the other half goes to the child. Not a tax expert but I know with legal limitations added to the will and no doubt the right paperwork this works. If both parents have this same mirror will in effect it can reduce the risk of IHT somewhat. I have family who had a fear of IHT and did that. In the end they were only likely to pay a little IHT, but at the time with the rising house prices they feared IHT.

Tangled Metal wrote: 4 Nov 2024, 12:20pm

roubaixtuesday wrote: 4 Nov 2024, 11:56am

Tangled Metal wrote: 4 Nov 2024, 11:52am
This blogger says give the farm to the next generation to avoud IHT if you live 7 years afterwards. I thought you could only give away £3000 per tax year. Can you really transfer the whole farm business over to avoud IHT like that?

AIUI there is no IHT on gifts more than 7 years into the past at death.

But I'm not a tax expert.

My point is that I thought there is a limit on what you can give away the cash gift it is £3k per year with 7 years of life after gift was made. not enough for a £2.65m farm really is it?

I know with houses it is possible to take advantage of the £300k or so allowance when say one parent dies leaving half the property value to the child. Then IIRC the surviving parent lives 7 years and then can leave another £300k or so allowance when the other half goes to the child. Not a tax expert but I know with legal limitations added to the will and no doubt the right paperwork this works. If both parents have this same mirror will in effect it can reduce the risk of IHT somewhat. I have family who had a fear of IHT and did that. In the end they were only likely to pay a little IHT, but at the time with the rising house prices they feared IHT.

Per JDSK link above, the £3k applies within the 7 years AIUI.

Beyond 7 years, there's no IHT on gifts.

All just my understanding.

Jdsk wrote: 4 Nov 2024, 12:17pm

Tangled Metal wrote: 4 Nov 2024, 12:11pm My concern is that cash to pay for IHT may not be there. I know from friends that money comes in at certain times of year, when your crops are ready. If you are a month or so before the next crop you can be really counting the pennies. Add in that the kids might only be paid or rather take a salary of say £25k and are possibly living in out of the way places that makes the cost of living more expensive too. I see from people I know that farming is not a job for family farm owners and their kids who are part of it, but a kind of vocation.
...

That implies that it isn't possible to plan. But it is. If you choose to keep the assets as personal estate until you die then inheritance tax is payable. But many other options are available. As is professional advice.

Jonathan

Interesting idea. Assets in a farm is in property and equipment mostly. Plan your way out of that, it would be interesting to know how.

Tangled Metal wrote: 4 Nov 2024, 12:23pm

Jdsk wrote: 4 Nov 2024, 12:17pm

Tangled Metal wrote: 4 Nov 2024, 12:11pm My concern is that cash to pay for IHT may not be there. I know from friends that money comes in at certain times of year, when your crops are ready. If you are a month or so before the next crop you can be really counting the pennies. Add in that the kids might only be paid or rather take a salary of say £25k and are possibly living in out of the way places that makes the cost of living more expensive too. I see from people I know that farming is not a job for family farm owners and their kids who are part of it, but a kind of vocation.
...

That implies that it isn't possible to plan. But it is. If you choose to keep the assets as personal estate until you die then inheritance tax is payable. But many other options are available. As is professional advice.

Interesting idea. Assets in a farm is in property and equipment mostly. Plan your way out of that, it would be interesting to know how.

Pass it on to the family, form a partnership, company or trust. Insure against inheritance tax.

Jonathan

It is all extra cost and paperwork though.
Solicitors benefit (again).
The State gains very little.

The 7 year gift works I guess but don't have an accident or a heart attack.
Or your family lose more than you.
A lottery where none existed before.

PDQ Mobile wrote: 4 Nov 2024, 1:18pm It is all extra cost and paperwork though.
Solicitors benefit (again).
The State gains very little.

The 7 year gift works I guess but don't have an accident or a heart attack.
Or your family lose more than you.
A lottery where none existed before.

This all applies to families who don't have a farm.