GeofCox@GeofCox@climatejustice.social
@greg_harvey@tooting.ch
I would need to see very detailed figures to convince me that this is a real problem (though I of course believe that some farmers have fallen for the big landowners' and tax-dodgers' propaganda on it).
Nearly half of farmers don't actually own all or part of their land; the average UK farm holding is only about 200 acres - but the vast majority are smaller than this in terms of land ownership - actually nearly half are around 50 acres.
The £1million threshold does not stand alone - it was introduced alongside other existing allowances, which can easily amount to £3million - and of course there are other tax planning measures that can minimise inheritance tax in other ways. In effect, only farms larger than 350 acres should be affected by Labour's inheritance tax changes. If a farmer with that amount of land is really marginal, when most manage on less than 200 acres, maybe they should consider getting out of farming altogether ?
It's not just me saying this by the way - independent tax experts like Richard Murphy have made similar points (eg. https://www.taxresearch.org.uk/Blog/2024/11/18/farmers-protesting-about-inheritance-tax-have-got-their-econonics-and-arguments-wrong/)
With any tax changes, there will of course be winners and losers, but in this case almost all substantial losers are going to be very large landowners - especially those whose main purpose was to dodge tax - but the vast majority of farmers, and the rest of us gain, because the inheritance tax will bear down on land prices, enabling many young, efficient small farmers to set up or expand - and also increasing yields (which are generally higher for smaller farms). Note also that as land prices fall, more farmers fall below the tax thresholds anyway.
It's very analogous to the UK housing mess - taxing unearned gains less than earnings incentivises asset value inflation, putting houses - and land - out of reach of everybody but the relatively wealthy - and at the same time undermining the country's productivity by channeling investment into assets, away from enterprise, efficiency, etc...
Greg Harvey 🌍
@greg_harvey@tooting.ch
@GeofCox@climatejustice.social I'll find out what his acreage is, but a friend of mine I was talking to just last week is farming his dad's old farm. His dad is in his 90s, still around, still on form, but for how much longer? 🤷
It will be valued at around £2m (probably half of which is farmhouse and three cottages) and that will definitely put him out of business, the tax will not be survivable for his operation.
