Lots of people have asked why I think my proposed change to the Budget farming IHT proposal may not actually cost money, despite the fact it means family farms will escape IHT entirely. Some quick numbers on an electronic napkin: - ThreadSky

danneidle.bsky.social • 105 days ago

Lots of people have asked why I think my proposed change to the Budget farming IHT proposal may not actually cost money, despite the fact it means family farms will escape IHT entirely.

Some quick numbers on an electronic napkin:

Comments

eponymousgeorge.bsky.social•105 days ago

A lot of writhing over there in Elon’s snake pit, so this place is a pleasantly quiet one to say well done and we should all be grateful for this successful effort to shed light and not heat on this mess.

julianstirling.bsky.social•105 days ago

Doesn't this also exempt huge estates from inheritance tax?

axj866.bsky.social•105 days ago

Ideas such as a current farm residency requirement, heirs’ commitments to continue farming for x years, or practicing nature-friendly farming practices in exchange for IHT concessions have not been explored, but still could be (much to be learned from such approaches in Europe – especially France).

mrsjimc.bsky.social•105 days ago

Would be interesting to ponder (but at risk of head exploding) how this might impact on land values.

mrc7cam.bsky.social•105 days ago

I would think it should lead to a stabilisation or even a fall in the price of agricultural land. Those using APR purely to avoid IHT would want to sell land and use other planning strategies.

daniel-phillips.bsky.social•105 days ago

This still means they are treated differently to others regarding the houses ect though, taxation needs to also be equitable not just about raising money

richardedsmith.bsky.social•105 days ago

I can see why that is a laudable aim but, even with the little knowledge I have, I can see some instances where exceptions are made. For example “entrepreneurs’ relief” halves the CGT paid by those owners selling their businesses if certain conditions are met

daniel-phillips.bsky.social•105 days ago

Which is a terrible exemption, as it isn't helping out entrepreneurs start businesses it's helping those who fail 🤷, the tax/incentive is on the wrong side.

catmike.bsky.social•105 days ago

This is the sort of smarter taxation policy Labour needs to embrace. They keep implementing badly the right thing, gifting their critics ammunition. Now they are an enemy of farmers and old people with badly thought through policies.

danneidle.bsky.social•105 days ago

The tl;dr version: all IHT planning-driven farmland estates at 40% may raise more money than is lost by reliving farmers from tax at 20% on £1.5m+ estates.

danneidle.bsky.social•105 days ago

Here are the official figures on how much the Budget proposal raises. That £200m in 2026/27 and £500m in 2027/28 is for IHT on all private businesses, farming and non-farming.

danneidle.bsky.social•105 days ago

There is no figure published for IHT from farming/farmland, so I've tried to make an approximate breakdown with some reasonable-ish assumptions

danneidle.bsky.social•105 days ago

I come out with £129m raised from farming IHT in 2026/27, which isn't madly inconsistent with the £200m in the official stats (but is probably too high).

danneidle.bsky.social•105 days ago

I'm proposing that farms and farmland continues to be entirely exempt from IHT provided their heirs don't sell. If they do, IHT is "clawed-back". That means family farms shouldn't pay IHT. People using farmland to avoid IHT will.

robincrosse.bsky.social•105 days ago

Do you forsee this carrying forward over multiple generations (so at sale the IHT= 1-(0.6^n), where n = the number of exempted inheritances)?

This ought to be very appealing to those who want to keep the land in the family, and being farmed.

I bet it wouldn't be though.

danneidle.bsky.social•105 days ago

So I divide the APR/BPR stats into "real" farmers, who'll benefit from our proposed modification, and IHT planning people, who won't. Using the figures derived in this article https://buff.ly/3Ol9R1Q

mark-edwards.bsky.social•104 days ago

Isn't it just a matter of HMRC looking at the intention behind a person's action - like they do in other circumstances? Proper farmers left alone. Millionaire investors in farmland merely to benefit from the IHT treatment denied all IHT reliefs completely. I thought that the GAAR was still in force?

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