Inheritance tax

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82157892#Comment_82157892

When someones dies they no longer own the estate. The ownership must pass to other people or entities and that is regulated by civil law. Changes in ownership are generally taxed and that goes for IHT too. The basis of this taxation is the regulation of trade and the use of tax revenue for the common good.

Section62

https://forums.moneysavingexpert.com/discussion/comment/82158228#Comment_82158228

If they are making enough to pay the mortgage how would a change in land value bankrupt them?

Might bring them into negative equity, but thats the cost of making property affordable again.

Although long-term agricultural mortgages exist, farm finance typically involves a combination of commercial loans, overdrafts, and HP. These, even if not secured on the land itself, will be assessed on the viability of the farm as a business and the assets it holds.

If the principal business asset - the land - has significantly decreased in value then lenders will see their lending as higher-risk, and either offer less attractive terms, or simply refuse to lend.

If you've got a £100k 5-year loan coming to the end of term you need to be able to pay that money back. Typically by borrowing money in the form of a new loan. If you can't get the money in time, and the lender isn't willing to wait, then you go bankrupt.

Being able to service your debt is a fundamental of doing business. If there's a whiff of problems the credit lines can dry up faster than you can say "thats the cost of making property affordable again". If you aren't able to buy seed, fertiliser, chemicals, diesel, animal feed etc on credit, and nobody will lend you money, you no longer have a viable business. You go bankrupt.

This isn't unique to farming - all kinds of businesses (including factories) - have folded when lenders lost confidence in getting their money back.

So that real farmers have a chance of buying some land from tax avoiding £billionaire landowners posing as farmers.

If the policy objective is to allow new people to enter the farming industry, or to switch from renting to buying, the policy will fail.

As explained above, people hoping to become (/owner) farmers will rely on borrowing, unless they started wealthy. With experienced farmers going bankrupt as a result of falling land values, the banks are not going to lend to inexperienced farmers nor those who don't already have substantial capital of their own at risk.

Clarkson is the only one I can think of who openly admitted he put his money into agricultural land to avoid tax. The rest of them seem more
discreet about it. Especially when Clarkson was reminded of it when he was campaigning to keep the IHT exemption on Agricultural Land!!!

Clarkson is well known for making 'controversial' comments, not all of which are things he actually believes. It would be a mistake to base UK IHT policy on something he once said.

But whatever the reason for Dyson's move, doesn't alter the fact there is a very strong tax incentive to close UK factories etc and Invest in agricultural land instead. Which is what I said. Hardly a recipe for economic growth is it?

Cause and effect.

Is there any evidence to show that IHT policy on agricultural land is causing UK factories to close? It doesn't follow that people investing in agricultural land would invest in 'factories' instead.