Governments First Budget

Rosie51

growstuff The figures were a quote (c&p) from the piece you linked, I didn't make them up.

Well as long as we can all expect to live another 15 years after age 70 that's fine, not much chance of getting caught out. Maybe the state pension age should be raised even higher if 70 is considered young!

No, we can't all expect to live for 15 years beyond 70 (some people die before 70) - it's an average - some people will live for much longer than 15 years.

I think you should read the piece again.

David49

growstuff

Interesting thread by Dan Neidle about IHT on small farms:

threadreaderapp.com/thread/1851956384167776598.html

The figures are misleading because the value under 500k are not commercial farms, it’s been decades since a living can be made from 40acres on a lowland farm. It represents retired farmer who have sold off land over the years and paid CGT on that sale or gifted land previously.

To be commercial 200 acres might be profitable if it’s very intensive, growing crops 500 acres is needed to survive. So the capital there is £6m at current values. IHT on that is substantial, if property has to be sold CGT is payable, add to that sale costs over 30% of value is lost and the reduction in acreage makes the farm uneconomic.

So what sort of income do you think a 500 acre farm would generate?

I agree that 200 acres is more a hobby farm than a profitable farm enterprise, but there's a lot of diversification at that level, surely?

ronib

LD well actually HM Inspectors of Tax know quite a lot too. They are paid a fraction of £5 million for their efforts.
90 per cent tax bands surely need to be reintroduced when this country is on its knees?

What are you on about?

Are you claiming that Dan Neidle doesn't understand tax? I don't really care how he made his money, so long as it was legal and he paid his own taxes.

MaizieD

David49

growstuff

Interesting thread by Dan Neidle about IHT on small farms:

threadreaderapp.com/thread/1851956384167776598.html

The figures are misleading because the value under 500k are not commercial farms, it’s been decades since a living can be made from 40acres on a lowland farm. It represents retired farmer who have sold off land over the years and paid CGT on that sale or gifted land previously.

To be commercial 200 acres might be profitable if it’s very intensive, growing crops 500 acres is needed to survive. So the capital there is £6m at current values. IHT on that is substantial, if property has to be sold CGT is payable, add to that sale costs over 30% of value is lost and the reduction in acreage makes the farm uneconomic.

So what sort of income do you think a 500 acre farm would generate?

I agree that 200 acres is more a hobby farm than a profitable farm enterprise, but there's a lot of diversification at that level, surely?

Well, that's my understanding too. If a £6 million farm can only make £20k profit, something is going very wrong. Quite honestly, the farmer might as well sell up and invest the money in high street savings account and not even bother about IHT.

growstuff what am I on about? Rachael Reeves has done a great job of targeting poor people and has left the highest paid completely untouched by a tax raid. It’s quite obvious to me if no one else!

Paul Johnson, the IFS director, accused the Government of playing “silly games” with the finances, under which officials “pencil in implausibly low spending increases for the future in order to make the fiscal arithmetic balance”.

He warned: “I am willing to bet a substantial sum that day-to-day public service spending will in fact increase more quickly than supposedly planned after next year.”

Yep, she’s targeted poor people by increasing the minimum wage, and ‘left the highest alone’ by increasing IHT, CGT and introducing VAT on private education

I have just seen this, as it is from a farmer I wouldn’t be so presumptuous to say he is wrong.

^A 500 ac farm worth £5m with past APR relief had no IHT liability now incurs a liability of 20% on £4m, a £800k bill, amortised over 25 years at 8% has an annual repayment of £75.2k.
That won’t work financially.
Who’s going to break the news to their children who want to farm?^

… oh, forgot stamp duty increase on 2nd homes - that’s left the highest paid ‘completely untouched’ as well.

LizzieDrip

Yep, she’s targeted poor people by increasing the minimum wage, and ‘left the highest alone’ by increasing IHT, CGT and introducing VAT on private education

I am guessing that there are a fair few small businesses with over five employees who will not get relief on extra NI, along with having to pay employees more will in all probability close.

Not every small to medium business makes enormous profits, a fair few are just about keeping their heads above water.

More people on the dole, empty business premises, higher prices for all.

ronib

growstuff what am I on about? Rachael Reeves has done a great job of targeting poor people and has left the highest paid completely untouched by a tax raid. It’s quite obvious to me if no one else!

ronib If she's done such a grand job of targeting poor people, how come (apart from WFP) the budget hasn't affected me directly in any way? (That's not to say I won't eventually be affected indirectly.)

LizzieDrip

… oh, forgot stamp duty increase on 2nd homes - that’s left the highest paid ‘completely untouched’ as well.

Only if they sell them.

The so called mega rich have already got their tax accountants beavering away in order to mitigate some if not all of these extra taxes.

This budget is and will hit those who have saved for retirement, invested in a rental instead of a pension pot.

The U.K. will be the only country in Europe to charge VAT on education, not something to boast about is it?

LD you do realise that tax lawyers make millions from advising clients on tax evasion?

growstuff If a £6 million farm can only make £20k profit, something is going very wrong. Quite honestly, the farmer might as well sell up and invest the money in high street savings account and not even bother about IHT.

I've missed this, who has said a £6million farm can only make £20k profit? A link would be good.

The U.K. will be the only country in Europe to charge VAT on education, not something to boast about is it?

VAT is being charged on education businesses. Education shouldn't be a profit taking exercise.

This budget is and will hit those who have saved for retirement, invested in a rental instead of a pension pot

In what way will it hit them? Genuine question.

As I’m not a 2nd home owner I haven’t drilled down into this aspect of the budget. Perhaps those with greater knowledge in this area can inform me.

MaizieD

David49

growstuff

Interesting thread by Dan Neidle about IHT on small farms:

threadreaderapp.com/thread/1851956384167776598.html

The figures are misleading because the value under 500k are not commercial farms, it’s been decades since a living can be made from 40acres on a lowland farm. It represents retired farmer who have sold off land over the years and paid CGT on that sale or gifted land previously.

To be commercial 200 acres might be profitable if it’s very intensive, growing crops 500 acres is needed to survive. So the capital there is £6m at current values. IHT on that is substantial, if property has to be sold CGT is payable, add to that sale costs over 30% of value is lost and the reduction in acreage makes the farm uneconomic.

So what sort of income do you think a 500 acre farm would generate?

I agree that 200 acres is more a hobby farm than a profitable farm enterprise, but there's a lot of diversification at that level, surely?

Why would 200 acres be a hobby farm?

Many productive farms are less than 200 acres, or about 70 hectares you prefer, many fruit farms may be less than that.

MaizieD

^The U.K. will be the only country in Europe to charge VAT on education, not something to boast about is it?^

VAT is being charged on education businesses. Education shouldn't be a profit taking exercise.

Play on words MaizieD

VAT is being charged on school fees for those who chose not to go down the conventional route of state education, this is a tax on education.

Education business aren’t Academies run as businesses?

Perhaps the Government considers farmers to be in the category of Landowners rather than Working People.

🤔

GrannyGravy13

LizzieDrip

… oh, forgot stamp duty increase on 2nd homes - that’s left the highest paid ‘completely untouched’ as well.

Only if they sell them.

Stamp duty is paid when you purchase a property.

We completed on the purchase of our "second home," ie retirement flat, last month. We're glad we missed the increase!
(We're anything but "highest paid.")

LizzieDrip

^This budget is and will hit those who have saved for retirement, invested in a rental instead of a pension pot^

In what way will it hit them? Genuine question.

As I’m not a 2nd home owner I haven’t drilled down into this aspect of the budget. Perhaps those with greater knowledge in this area can inform me.

I know folks who have opted to invest in one or two properties to rent as opposed to investing in a pension plan, shares etc.,

With the higher stamp duty this will make them think twice about future purchases along with the added CGT when they come to sell their existing property/ies

Allira

Perhaps the Government considers farmers to be in the category of Landowners rather than Working People.

🤔

I think you are correct 👍

Thanks GG.

I’ll keep my views to myself about people who own 2 or 3 properties to be used as a cash cow.

GrannyGravy13

Allira

Perhaps the Government considers farmers to be in the category of Landowners rather than Working People.

🤔

I think you are correct 👍

What has that to do with farming?

🤔

One angry farmer in Scotland has many questions for what he calls the "metropolitan elite" in this government: One is - how does farming fit in with Angela Rayner's proposed four day working week?