Conservatives in disarray over 'sooner or later' tax promise

Pennywise

This became a non-issue anyway when Labour stole the Tories' ideas and introduced the transferable nil rate band, so we already have £600k IHT free for the average married couple, which takes most couples out of IHT anyway. The £300k limit was a joke. £600k is more realistic. Havn't Labour already announced the nil rate bands will be increasing, so we're probably close to £650k or £700k IHT free shortly anyway. There will only be a tiny proportion who's estates will be between say £650k and £1m to whom any of this will matter. It's just a big non-story. Kenneth Clark should be strung up by his what-nots for making such an issue out of it. Osborne and Cameron should kick their PR gurus and get the real story made public.

Rochdale_Pioneers

Pennywise wrote: »

Osborne and Cameron should kick their PR gurus and get the real story made public.

Thats the last thing they want. The real story is that IHT is paid on something like 7% of estates - the top 7%. What they have just recommitted to is a tax cut for the wealthiest as a priority over tax cuts for anyone else.

Pennywise

Rochdale_Pioneers wrote: »

Thats the last thing they want. The real story is that IHT is paid on something like 7% of estates - the top 7%. What they have just recommitted to is a tax cut for the wealthiest as a priority over tax cuts for anyone else.

You're missing my point. How many of that 7% have estates between say £650k and £1m - probably very few. Those with estates over £1m, probably at least 6% will still pay IHT. The number of people with estates under £1m but over say £650k is tiny so the whole thing is a non-story. That's what the PR people need to be saying.

Rochdale_Pioneers

Pennywise wrote: »

You're missing my point. How many of that 7% have estates between say £650k and £1m - probably very few. Those with estates over £1m, probably at least 6% will still pay IHT. The number of people with estates under £1m but over say £650k is tiny so the whole thing is a non-story. That's what the PR people need to be saying.

The Tories didn't think it was a non-story when they paraded it as saving the middle class from death tax. To turn around now and say "actually none of you were liable to pay it anyway" makes them look like idiots or liars. They'd have been better off letting it quietly fade into memory as a bad idea - which is what Clarke was saying before his handlers forced him to issue a "clarification" that what he said was actually the opposite of what he meant to say.....

moggylover

Generali wrote: »

Under my regime, farmland would only be included up to being a secondary source of income. Tertiary and beyond you have to stump up your 80%.

An heir would be able to use the 20% (s)he inherited as a deposit and the income from the land as income to make mortgage payments.

Generali, I think that would bring about a catastrophic decline in farming in areas like this, if I am reading you right, and I do not believe that this is in the interests of the economy.

Whilst I acknowledge that vast arable farms "probably" still show relatively good profit margins, and whilst I acknowledge that a bit of imaginative juggling on profits on farms goes on (although nowhere near as widespread as in finance) I'm afraid that many a farmer around here probably only has a net income of somewhere in the region of £20,000/£25,000 per annum (mostly dairy and sheep, not a great area for veg., etc.) and even if one allows that after the "juggling" this is possibly doubled that is not much of an income for a job which is basically a lifestyle rather than a business and one expects to work 365 days a year and sometimes 24 hr days (i.e. during lambing season) where you grab a doze in the sheds:D .

We are already far too dependant on food being imported, and if we start penalising farming families even more then I believe that would be very dangerous to the industry and would leave us even more exposed in the long term.

Already around here, we see large numbers of "next generation" farm kids leaving the industry because the family farm will not support the whole family, and lots of farmers wives that have to have outside jobs in order to keep the farm going. Those that I know that have bought farms on mortgages/loans instead of inheriting them are often really struggling and if it were not that they wanted to live away from the city type rush they would get out. They are not really encouraging their kids to take it on afterwards either, just trying to keep their heads above water to provide a nicer area for their kids to grow up in.

Many families that inherit a farm are also having to sell off the original farmhouse in order to get rid of what death duties there are, and sometimes then it is taking years to get planning for another home on the farm (and I know several families that have ended up living in caravans within a barn for as much as 7 or 8 years just in order to get that planning.

I am all in favour of taxing vast inherited wealth, and also finding a way of closing all tax loopholes but I really think that if those inheriting farms had to mortgage them then the industry would be killed off very quickly.

lostinrates

moggylover wrote: »

Generali, I think that would bring about a catastrophic decline in farming in areas like this, if I am reading you right, and I do not believe that this is in the interests of the economy.

Whilst I acknowledge that vast arable farms "probably" still show relatively good profit margins, and whilst I acknowledge that a bit of imaginative juggling on profits on farms goes on (although nowhere near as widespread as in finance) I'm afraid that many a farmer around here probably only has a net income of somewhere in the region of £20,000/£25,000 per annum (mostly dairy and sheep, not a great area for veg., etc.) and even if one allows that after the "juggling" this is possibly doubled that is not much of an income for a job which is basically a lifestyle rather than a business and one expects to work 365 days a year and sometimes 24 hr days (i.e. during lambing season) where you grab a doze in the sheds:D .

We are already far too dependant on food being imported, and if we start penalising farming families even more then I believe that would be very dangerous to the industry and would leave us even more exposed in the long term.

Already around here, we see large numbers of "next generation" farm kids leaving the industry because the family farm will not support the whole family, and lots of farmers wives that have to have outside jobs in order to keep the farm going. Those that I know that have bought farms on mortgages/loans instead of inheriting them are often really struggling and if it were not that they wanted to live away from the city type rush they would get out. They are not really encouraging their kids to take it on afterwards either, just trying to keep their heads above water to provide a nicer area for their kids to grow up in.

Many families that inherit a farm are also having to sell off the original farmhouse in order to get rid of what death duties there are, and sometimes then it is taking years to get planning for another home on the farm (and I know several families that have ended up living in caravans within a barn for as much as 7 or 8 years just in order to get that planning.

I am all in favour of taxing vast inherited wealth, and also finding a way of closing all tax loopholes but I really think that if those inheriting farms had to mortgage them then the industry would be killed off very quickly.

I'm torn, because I believe both ewhat Gen says economically and socially, and from my personal experience, with what you say.

The thing is, farming is a choice, on an individual level, and its tough fo those that don't understand the vocation and dedication needed for livestock farming in particular, but its also possible for people to be brought up on farms and get other jobs. On an animal welfare front I feel very strongly that livestock farming in UK, while having a LONG road to get down to be exemplary, in current standard is among the best, and so on a scale higher than that of personal envy, I would hate to see the end of British livestock farming. How its kept going in some recent times I don't know, I was involved a little in clean up in 2001, and it broke my heart. The increased rate of suicide and suicide attempts was heartbreaking, and very close to me. I could have gone into farming then, but the bile rose to easily to what had gone on and how.

moggylover

lostinrates wrote: »

I'm torn, because I believe both ewhat Gen says economically and socially, and from my personal experience, with what you say.

The thing is, farming is a choice, on an individual level, and its tough fo those that don't understand the vocation and dedication needed for livestock farming in particular, but its also possible for people to be brought up on farms and get other jobs. On an animal welfare front I feel very strongly that livestock farming in UK, while having a LONG road to get down to be exemplary, in current standard is among the best, and so on a scale higher than that of personal envy, I would hate to see the end of British livestock farming. How its kept going in some recent times I don't know, I was involved a little in clean up in 2001, and it broke my heart. The increased rate of suicide and suicide attempts was heartbreaking, and very close to me. I could have gone into farming then, but the bile rose to easily to what had gone on and how.

It is something that I am also torn on because I do not believe that inherited wealth is a great thing. However, I think it is a mistake to think in terms of farms being a source of "great wealth" because it is really a case of being land rich and cash poor. Perhaps the best way would be to "defer" the tax on inheriting farms, so that if the farm is sold and the family moves away from farming the IHT comes into play, but that as long as it remains farmed by the inheritors (and their inheritors) then it does not.

As to those inheriting a farm being able to "buy in" prior to inheriting: this would suppose that they actually had a "wage" with which to do so, but on most farms this does not happen and the whole family just "works" the farm and the needs are provided jointly with extras as and when possible. Most of those that stand to inherit a farm and continue to work it with their parents have to do so with little more than pocket money incomes I'm afraid: which is why so many are leaving agriculture upon leaving school.

It is a truly mixed blessing life: some of it is wonderful and some long hard and lonely, as has been learnt by those coming here and thinking they could do it, only to give up and go home a few years later when they realised the sheer volume of work involved for comparatively poor income.

Lambing sounds wonderful until you have spent 6 or 7 nights out in a barn or field in cold wet weather struggling to cope with 20 all "dropping" at the same time (and only 2 of you) and 4 or 5 in difficulties and previously birthed ones that are not doing well needing checking on at least every couple of hours as well.

Shame we can't persuade the little perishers to give birth in the daytime in only nice weather:D .

The emotional toll of lambing time or even calving can be horrendous as well as I have know men who have spent all their lives farming to sob their hearts out at the loss of a particular cow or ewe during the birth and some nights when all the births appear to have difficulties and the stillbirth rate is high (and you do get them) you come away so heavy of heart that is unbelievable.

For many families inheriting a small farm (even well less than 100 acres is going to cost you something close to £600K at the moment due to the past 10 years pressure caused by incomers) they are also inheriting quite a bit of debt involved in keeping up the farm, and with current agri land prices being pushed up to around £5K to £6K by the horsey fraternity many farms cannot afford to buy the extra land needed to increase their profitability as one cannot earn sufficient per acre in agriculture to justify those prices. The current house price crash is also impacting upon land prices as well though, so hopefully this will help if farmers can get access to finance when/if the land returns to a more realistic figure (which I am told should be more in the region of £1.5K on average - less for rough and very sloping ground, and a little more for extremely good, flat and well drained pasture) that they can snap it up before any pressure causes it to rise again.


P.S. Ex comes from a farming background and there are several farms in the extended family - but I do not stand to inherit one (and nor do my kids as the farms are in the hands of great-uncles and aunts rather than grandparents) so have no vested interest, but do believe that it is a much harder life for most small farmers than people believe.

lostinrates

moggylover wrote: »

It is something that I am also torn on because I do not believe that inherited wealth is a great thing. However, I think it is a mistake to think in terms of farms being a source of "great wealth" because it is really a case of being land rich and cash poor. .

a point I raised in Ninky's how much money thread.

We're possibly about to make an offer on a property that will see me return to agriculture (and equestrian enterprise ). I'm scared and hopeful. But its IMOextraordinarily sad that to get us to this point we needed a city income.

Pennywise

Rochdale_Pioneers wrote: »

The Tories didn't think it was a non-story when they paraded it as saving the middle class from death tax. To turn around now and say "actually none of you were liable to pay it anyway" makes them look like idiots or liars. They'd have been better off letting it quietly fade into memory as a bad idea - which is what Clarke was saying before his handlers forced him to issue a "clarification" that what he said was actually the opposite of what he meant to say.....

You're still missing the point. The Tories came up with the £1m limit at time when there was no transferable nil rate band and a lower threshold. Almost immediately, Labour announced increases in the threshold and introduced the transferable nil rate band, at a stroke effectively increasing the IHT threshold from about £250kish to £600k. Tories havn't made much of it since because Labour stole the idea and took most people out of IHT. That's why it's a non-issue now - it wasn't a non-issue when the Tories first proposed it weeks before Labour introduced their own alternative.

moggylover

lostinrates wrote: »

a point I raised in Ninky's how much money thread.

We're possibly about to make an offer on a property that will see me return to agriculture (and equestrian enterprise ). I'm scared and hopeful. But its IMOextraordinarily sad that to get us to this point we needed a city income.

I agree entirely (and will forgive you the horses:rolleyes: ) - I have known lots of people who have moved here and bought a farm with the proceeds of their houses in more expensive areas and thought that they would make lots of money, only for one or other to have to return to work (with a major commute on less than easy roads) in order to finance the project. Even when you own the farm itself outright, if you want anything more than a fairly "self-sufficient" and basic lifestyle it is not going to provide it.

Good luck with your project, I am also keeping my eye open for a suitable smallholding (although no horses for us, I couldn't afford the vets bills:eek: on top of the other pets we have) but it will still only be possible to keep it running if I continue to earn elsewhere.