Wild fires in BC Canada.

[artie]

I thought set aside was a thing of the past.

It maybe. I sold my farm a few years back.

 

[paulrbarnard]

Assume inheritance tax is payable on agricultural land at the current rate of 40% and speculate on the possible consequences.

• to be paid some land would almost certainly need to be sold
• it would likely be sold to a business. Individual farmers are less likely as earlier IHT would likely have left them with limited "free" capital anyway
• IHT (as for most other share holdings) would then be payable on the value of shares held, not the land or other underpinning assets.
• the government is effectively extracting capital from the agricultural sector through taxation. There are consequences - possibly lower investment, lower environmental standards, reduced food production as imports become relatively cheaper

The alternative - the government acquire the land just as property left to National Trust is exempt from IHT. Assuming their intent would be to ensure the land is used for the benefit of the community for food production, it is open to debate whether they would:

• farm the land directly as a nationalised business, or
• rent out land to individual farmers in much the same way as social housing

Both scenarios require government to legislate controls to to ensure that the land is used for appropriate purposes and to agreed environmental standards, with remedies for non-compliance.

It is unclear what material benefits there are to justify making changes to the status quo - it risks degrading the quality of the agricultural sector rather than enhancing it. The answer should depend on the solution best able to optimise value to the community, not driven by political dogma and envy.

Or abolish inheritance tax…

 

[Tris]

IHT raised £7.1 billion in the last tax year, or less than 1% of tax receipts. Income tax raised £268 billion by comparison, or around 25% of tax receipts. Ditching IHT would seem a 'relatively' cheap vote winner

 

[Jameshow]

Assume inheritance tax is payable on agricultural land at the current rate of 40% and speculate on the possible consequences.

• to be paid some land would almost certainly need to be sold
• it would likely be sold to a business. Individual farmers are less likely as earlier IHT would likely have left them with limited "free" capital anyway
• IHT (as for most other share holdings) would then be payable on the value of shares held, not the land or other underpinning assets.
• the government is effectively extracting capital from the agricultural sector through taxation. There are consequences - possibly lower investment, lower environmental standards, reduced food production as imports become relatively cheaper

The alternative - the government acquire the land just as property left to National Trust is exempt from IHT. Assuming their intent would be to ensure the land is used for the benefit of the community for food production, it is open to debate whether they would:

• farm the land directly as a nationalised business, or
• rent out land to individual farmers in much the same way as social housing

Both scenarios require government to legislate controls to to ensure that the land is used for appropriate purposes and to agreed environmental standards, with remedies for non-compliance.

It is unclear what material benefits there are to justify making changes to the status quo - it risks degrading the quality of the agricultural sector rather than enhancing it. The answer should depend on the solution best able to optimise value to the community, not driven by political dogma and envy.

Sounds like the next potato famine to me!

 

[Terry - Somerset]

IHT raised £7.1 billion in the last tax year, or less than 1% of tax receipts. Income tax raised £268 billion by comparison, or around 25% of tax receipts. Ditching IHT would seem a 'relatively' cheap vote winner

Last year 41000 people paid IHT. Over 30m paid income tax.

As a vote winner a 1-2p cut in income tax will benefit 80 times more people than stopping IHT.

Ditching IHT may be a vote winner for the aged wealthy voter demographic but unlikely to win much support from those with more average incomes or wealth.

As an opinion - the rules for IHT need to be improved - firstly to limit avoidance, and secondly to have a progressive tax rather than everything over X at 40%.

 

[Phil Pascoe]

The rules for IHT need to be improved? Too right. The royal family should pay it.

 

[paulrbarnard]

Interesting how Inheritance tax immediately became ‘them and us’ political so quickly.
The problem with IHT is that it forces the break up of farms which is driving more land into commercial holdings rather than agricultural use. The amount IHT contributes to overall taxation is minimal but the effects of it are counterproductive. For sure everyone jumps to the “tax the rich” dog whistle but that is simply a mindless knee jerk brought on by sound bite rhetoric from self serving political factions.
Much better to close the numerous tax loop holes and avoidance schemes than have an over simplified tax that forces the break up of assets.

 

[deema]

It’s interesting the death tax created a situation where to shelter your money buying buying land is a good mechanism. If you removed the death tax the incentive / attraction of land ownership for IHT management would disappear and I suspect we would see vast swathes of land being divested as it really isn’t an attractive asset for anything other than fathers and IHT management.

 

[Cobbs]

It’s interesting the death tax created a situation where to shelter your money buying buying land is a good mechanism. If you removed the death tax the incentive / attraction of land ownership for IHT management would disappear and I suspect we would see vast swathes of land being divested as it really isn’t an attractive asset for anything other than fathers and IHT management.

Explain your thinking?

 

[Phil Pascoe]

The UK tax code is 10 million words and 21,000 pages. The Hong Kong tax code, widely held by tax lawyers to be the most admirably efficient in the world, is 276 pages.

Part of the problem? Shurely not?

 

[deema]

Explain your thinking?

The return on investment is pitiful compared to other investment instruments. If it wasn’t for the IHT, there are better things to put your money into.

 

[Cobbs]

The return on investment is pitiful compared to other investment instruments. If it wasn’t for the IHT, there are better things to put your money into.

I'll admit that the tax system in this country has always been well over my head, so I won't fight you on that one...

 

[Lefley]

The UK tax code is 10 million words and 21,000 pages. The Hong Kong tax code, widely held by tax lawyers to be the most admirably efficient in the world, is 276 pages.

Part of the problem? Shurely not?

WowserS. Our original tax code was 10 pages long. Then govt needed more money. It's now over 3,200. Pages long. If it was just a simple flat tax situation. We could do our taxes in 5 minutes on a postcard size document.

how long does it take to become a tax person over there? 3 years just to understand the code? That's why rich doesn't pay taxes. When code gets that big, they're are lots oF loop holes etc that rich people that can afford to hire tax lawyers to find and use and circumvent taxes.

 

[John Brown]

https://www.theguardian.com/environ...-uk-trillions-retracted-due-to-factual-errors
Interesting. Only a 10,000 fold error.

 

[Cobbs]

https://www.theguardian.com/environ...-uk-trillions-retracted-due-to-factual-errors
Interesting. Only a 10,000 fold error.

I'm sure we've all done it!

 

[Phil Pascoe]

https://www.theguardian.com/environ...-uk-trillions-retracted-due-to-factual-errors
Interesting. Only a 10,000 fold error.

It's The Gruinard.

 

[Phil Pascoe]

When code gets that big, they're are lots oF loop holes etc that rich people that can afford to hire tax lawyers to find and use and circumvent taxes.

I have heard it mooted that that's precisely why has been allowed to get so big.

 

[John Brown]

It's The Gruinard.

It's the Guardian reporting it - they didn't make the error. Or are you suggesting Civitas got it right, and the Guardian misreported it?

 

[Jacob]

....... solution best able to optimise value to the community, not driven by political dogma and envy.

Yes, "socialistic" solutions. They would call it dogma of course. More rational than the dogma of divine rights of property owners.

 

[John Brown]

I'm sure we've all done it!

The trouble with mistakes like this is that they get embedded in the public consciousness, are are hard to shift. I read a Canadian rant a few years back explaining how EVs were actually way more expensive per mile than ICEs, I was curious, as I imagined Canada had fairly cheap hydro-electric power. Turned out the cost of a kWh had been taken as $1.50, instead of 15c.
People still believe spinach is a wondrous source of iron, years after a similar mistake was exposed. I sometimes wonder if these "mistakes" are intentional.
Probably not the spinach one.