Governments First Budget

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.

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

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?

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

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.

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

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?^

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

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.”

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!

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.

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.

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?

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.

MaizieD The o/p is about the government’s first budget. My comment is not irrelevant.

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?

ronib

MaizieD The main thrust of the government is to raise taxes. It needs to broaden its remit to include the ridiculously paid partners in top law firms. She doesn’t seem inclined to take them on.
£5 million a year amounts to what kind of tax bill?

It's still irrelevant.

Dan Neidle, “described by taxation law specialist Jolyon Maugham[5] and tax publication ITR[6] as possibly the UK's leading tax lawyer”.

Isn’t it great that some GN posters appear to know more about IHT than him!

But, I suppose if his expert knowledge doesn’t fit your chosen narrative…

MaizieD The main thrust of the government is to raise taxes. It needs to broaden its remit to include the ridiculously paid partners in top law firms. She doesn’t seem inclined to take them on.
£5 million a year amounts to what kind of tax bill?

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.

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

Nothing wrong with the original figures, Rosie51. You just forgot to factor in the 'paid over 10 years' bit.

ronib

Rosie51 Dan Neidle ex Clifford Chance partner on mega bucks before he took early retirement. Rachael Reeves could find rich pickings in this group?

I never cease to be amazed at your ability to introduce irrelevancy to a discussion, ronib. Neidle was a high powered tax lawyer. Exactly the person to know what he is talking about.

What he earned has nothing to do with farmers and IHT

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!

£20,000 over 10 years is, unless my maths is wrong, £2,000 per year, so not an entire year's profit.

I realise that small farms aren't particularly profitable, and the loss of the EU farm payments hasn't helped, but it should be do-able.

ronib

Rosie51 Dan Neidle ex Clifford Chance partner on mega bucks before he took early retirement. Rachael Reeves could find rich pickings in this group?

Yes, he was earning megabucks, which is why he knows a thing or two about taxation.