Separating wheat from chuff in the farm tax debate

https://www.theguardian.com/money/2024/nov/22/separating-wheat-from-chuff-in-the-farm-tax-debate

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Readers respond to an editorial about farmers having to pay inheritance tax when selling agricultural property priced at more than £1m

While largely in agreement with the sentiments expressed in your editorial (The Guardian view on taxing farmers: big landowners must pay their share, 19 November), I believe there are some issues that need to be understood and addressed. I run a small-scale dairy farm in partnership with my son. We own just over 80 acres and rent another 40 acres annually. This allows us to have a herd of up to 80 milking cows but, despite misguided government assurances, leaves us now vulnerable to the new inheritance tax (IHT) proposals and will make our farm non-viable for the next generation.

The average price of land in Northern Ireland is around £15,000 an acre and to maintain a dairy herd it is essential to upgrade facilities, machinery and the quality of livestock. This necessitates frequently borrowing money and results in very poor cashflow.

Farmers like me never expect to become millionaires in terms of realising the value of the land and other assets. We have a simple goal in life – to earn enough money to raise our families and to leave the farm in better shape than we got it. Farmers always encounter problems, be it daily issues on the farm, bureaucracy and regulation, the need to consider and mitigate against climate change, rocketing input costs, or the fact that farmers cannot themselves determine the price they receive for their produce.

The ability to ensure farm family inheritance is critical if farmers are to continue, and thousands of jobs here in Northern Ireland depend on farmers. The issue of non-farmers buying farmland to escape IHT is, I believe, simply addressed by ensuring that those who own land obtain the greater part of their income from the farm.Drew RobinsonDungannon, County Tyrone

I am a 67-year-old farmer. I was lucky to have been given 70 acres in my teens by my father, fearful of death duties, as they used to be called. He was wise and wanted me to be an accountant. I always wanted to farm and have built up a business worth about £4m by working a 60-hour week on average, taking risks and drawing less than the minimum wage from the business. My son has a degree in agriculture and joined the business about eight years ago.

I now face the prospect of giving my children the business and hopefully living seven years (to be exempt from IHT on the transfer), paying a market rent for my house, and living off the state pension and a small pension pot – as I repeatedly invested profit back into the farm. Contrast that with a state employee on a gold-plated pension. My father was right.Stephen HoltSpratton, Northamptonshire

A simpler, less divisive, better-targeted approach than changing agricultural property relief is needed to prevent tax avoidance by wealthy landowners. Practical suggestions, such as current farm residency, heirs’ commitments to continue farming, and nature‑friendly farming practices, in exchange for IHT concessions, have not been fully explored.

Additionally, IHT revenue where estates are sold could fund initiatives to support new entrants into farming, particularly if limiting tax avoidance leads to lower land prices. A collaborative effort between the National Farmers’ Union (NFU) and government on such ideas could reset relationships without either side losing face.Patrick CosgroveBucknell, Shropshire

What makes farmers think that they are such a special case when it comes to tax? For years, they have had an easy time regarding tax, with the burden falling on the rest of the population.

The price of farmland has fluctuated over the last 30 years, but has been, essentially, on a significantly upward trajectory, undoubtedly because of the tax benefits of holding farmland, as evidenced in statements by Jeremy Clarkson.

If the imposition of IHT means that land will have to be sold, then at least it will affect the richest farmers and landowners. This should make farmland more affordable and available to those who aspire to either an agricultural tenancy or the opportunity to buy land to create their own farm. This has long been a bugbear of agricultural students, who have found it impossible to gain their own farms.

My advice to farmers is to shut up and pay up like everyone else. Name and address supplied

I agree that tax-avoiding investors and the very rich should pay their share via the new 20% levy on inherited agricultural land. But family farmers who own their land have seen its value pushed up not by other farmers wanting to grow food and maintain our rural communities, but by the same actors who have propelled home ownership out of reach for so many – big capital, investors and the very rich buying into assets.

There is an easy solution. Allow exemption from the tax if land is a) inherited by a family member; and b) if the heir continues to farm it for at least five years. Tax is paid if the heir sells on within the conditional period, or, once this has expired, the land is sold on and not inherited.Christopher TannerLlandovery, Carmarthenshire

The coverage of the farmers’ opposition to the proposed introduction of IHT featured many claiming that their farms had been in the family for five generations, or since 1837 etc. Yet their relief from the tax was only abolished in 1984. How did they manage to pass the farm on before then? I have heard no one ask the question.Judy GriffithsDewsbury, West Yorkshire

I have listened to many media discussions about agricultural property relief. The government’s view that a £1m threshold does not affect many farmers is incorrect – even a small, so-called hobby farm could be valued at £800,000 plus. The average income of a UK farmer is stated as £50,000. Some would say that’s better than what they earn. But if they worked seven days a week for 12 hours per day, even at Christmas, and had to save now to pay IHT when they die, how much salary should they expect?

Some commentators I have heard talk about “these people”, meaning farmers, are urban dwellers who have no clue of the average farmer’s life – working with unpredictable animals, temperamental machinery and weather, and that’s just condensing it. It’s a challenging occupation, but the bit I’ve done I wouldn’t have missed for the world.Kenneth McBrideMallusk, County Antrim

The rapturous reception from protesting farmers to Jeremy Clarkson, a man who has boasted that he bought his farm to evade IHT is telling. Although the NFU pretends that this is all about protecting small family farmers, that organisation long ago ceased to care about anyone but the massive agribusinesses that have taken it over. It’s all about allowing the rich to keep more of their money, not looking out for the little person. The government should stick to its guns.Tony GreenIpswich, Suffolk

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