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(((Dan Hodges)))
@DPJHodges
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1h
That means Kemi Badenoch is committed to going into the next election with her two priorities being a tax cut for farmers with proprieties worth over £3 million, and a tax cut for parents of private school children. I'm not sure that's where the Tories need to be.

I think the Conservative party will really suffer under the 'noch.

She's the perfect storm. A clownish libertarian for the home counties retirees and a fiscally tight pseudo-globalist for the red wall. IMO If we keep the current leaders for 2029: Reform will be on a higher voter percentage and Labour a small majority or Libdem & Green confidence and supply. Honestly Nige is much closer to power than I want.

Johnson killed the modern Conservative party and Badenoch will be alienating the last of the base.

Next up, after Jeremy “I bought my farm in order to avoid inheritance tax“ Clarkson; that well known farmer Andrew Lloyd Webber, who definitely hasn’t bought 5,000 acres in order to avoid inheritance tax: https://x.com/Otto_English/status/1858860636609876027

Really not sure leading with these guys is doing the farming lobby any favours with the wider public? But maybe that’s just my left-liberal bubble speaking.

I'm not remotely left-liberal, but I don't get the sentimental drivel people spout about farming, any more than I did about coal mines in the 90s. Like any other marginal industry, if farmers can't survive without their epic tax breaks and subsidies they should go under, to allow the labour, land and capital to be used more efficiently by others. And small farms that benefit from the IHT break are exactly the least efficient ones that should go under first. Property doesn't suddenly become a national treasure because you plant crops or whatever on it. The world isn't short of food.

Having lower IHT is a good idea, but we should lower the overall rate rather than give out undeserved bungs to special interest groups, many of whom just use it as a tax dodge anyway.

Prediction: In this Parliament Labour will lose power in Wales, Scotland and the London mayoralty...

And will then be voted out of government in 2029.

Well, they say it's the hope that kills you and obviously some of the Conservatives on here have forgotten the pummelling they got just four and a half months ago and may still be a bit punch drunk.

I can't speak for Wales or Scotland but that's a courageous prediction for the London Mayoralty in 2028.

Will Sadiq Khan stand again? As I've said on here before, he made a catastrophic political error when announcing his decision to stand again so early. He must have thought at the time (January 2022) Johnson would recover from the mid-term polling and beat Starmer at the GE - that didn't turn out as planned. Instead, he could have waited and found himself a London constituency and would now be a prominent backbencher if not actually in Government.

He'll have to make another judgement call in early 2026 which I imagine he'll get wrong again.

The truth is London is a tough road to hoe for the Conservatives - they polled 20.6% in July against 43% for Labour, 11% for the LDs, 10% for the Greens and 9% for Reform so where is this candidate who will maximise the anti-Labour vote? The answer, as it has probably always been, is it's probably NOT a Conservative, Lib Dem, Green or Reform but a super-Independent who can motivate the anti-Labour vote.

I don't know who that person is or might be and I can't see the Conservative Party not standing a candidate and endorsing such an Independent but there's plenty of time for that to change.

London Tories need to find another Andy Street. Someone that is well known for being successful, but from outside party politics. Charlie Mullins would have been a great example, but he’s retired now.

A Mr J Clarkson isn't bad at this politics lark...

https://www.youtube.com/watch?v=MybK54EVzeA

Before I start my work day... I just wanted to chip in very briefly on the IHT and farms issue.

When I was a fund manager, two of my older colleagues bought farms. Partly this was because they were obsessive fans of shooting small birds out of the sky ("the humane harvesting of organic free range produce" claimed one). But mostly it was to enable them to take advantage of the inheritance tax break. This will - of course - have pushed up the price of farmland, because people like my colleagues will have acquired farms solely for tax reasons.

I am not a fan of exemptions. Why should passing on a shoe shop to one's daughter be subject to inheritance tax, but not a a corn field? And why should a town house be subject to tax, but a farm house be not.

On the other hand, inheritance tax is easily dodged by the wealthy and the well prepared. The use of trusts, gifts, and ensuring assets are held by corporate bodies is such that if you don't want to pay IHT, you don't need to.

I would therefore abolish it, and replace it with a very small (say 0.1%) gross assets levy.

As we need family farms for our food.

Labour could have kept the exemption for 3 generations or more of family farmers but refused as it is a measure of socialist class war

I don't understand.

Is corn from a family owned farm different to corn from a farm owned by a company?

A family owned farm will produce more food than a field sold to build houses.

Oh, so farmers never sell land to developers.

Well, I'm glad we've cleared that up then.

It's about stewardship.

Would you prefer Farmer Tess or Monsanto in charge of the corporate.

Plus re your previous post, game is one of the most natural foods to eat. Nice, free range life then shot out of the sky. And delicious.

And of course your ex colleagues bought farms because as well as the tax there is the status. And I appreciate you can switch round the priority of those but many City boys want to be Country Gents. The tax is just the icing on the cake.

OK.

By why should the stewardship of a farm be any different from the stewardship of any other business?

Look: I don't think IHT should force people out of family farms, and that's why propose something different. But we should - as much as possible - choose to make the tax system prioritize people making economically rational decisions.

And the IHT loophole on farmland encourages family farmers to sell their land! It doesn't encourage it them to steward it, it encourages them to take the big bucks from City Boys.

So, is it really achieving what it set out to do? Or is it resulting in farmers taking large retirement cheques?

Plenty of farmers though choose to stay because they like the life and, if the farm has come down through the generations as many have, feel a duty both to the land and to the production of food, for example.

The big estates you are talking about being sold to City boys are not in this category and are a tiny number of farms in the UK. No city boy is going to buy a working farm with a few hundred acres. And if they do they also feel a responsibility to its environment and upkeep.

Unlike a vast agribusiness which only has, rightly, a responsibility to its shareholders.

Note that the Netherlands elected it's most right wing gov't ever after their own gov'ts previous run in with farmers.

What we're seeing here is how a cliquey North London left-wing metropolitan Fabian set understands neither business nor farming, and how that so readily bleeds into policy.

I've been astonished at how politically inept they've been, but they've never done it before and lack the humility to listen to anyone who has.

Can you explain, in simple terms, why farmers deserve to pass on their farms to their heirs 100% tax free when others (with similar levels of assets in their estates) don’t?

It's not exactly 'deserve to'.

For us townies, in terms of beauty, conservation, recreational amenity, long-term stewardship of the countryside etc, it is seen as a better outcome if agriculture is done by family farmers with a long-term interest in the land rather than agribusinesses. It's not cut and dried, but I'm willing to buy that. The IHT dodge is a way of trying to keep farms in the hands of families with a long-term interest rather than agribusinesses.
I'm not convinced it's 100% effective, mind. But that's the reason for it.
What we should be arguing about is how we better effect that particular outcome (if we are agreed that the outcome is worthwhile - I think it is, but am open to persuasion.)

Unfortunately the net outcome of the IHT dodge has been to drive up the price of agricultural land even further out of reach of ordinary farmers.

It seems to me that this is a classic case of subsidising a proxy for the thing you want in the hope that you will get more of that thing & discovering that the market will very efficiently drive up the price of the proxy instead.

No it hasn't. We had this discussion yesterday. Farm land values didn't start to increase until almost 2 decades after the introduction of INT relief.

The rules on the taxation of trusts were changed in 2006. Look when farmland prices start to rocket: https://www.savills.co.uk/landing-pages/rural-land-values.aspx

It seems plausible that pre 2006, the wealthy were evading IHT by putting assets into trust. When trusts were hit with a 6% per decade asset tax, they started putting their money into one of the few UK assets that were still 100% free of inheritance tax: farmland.

THe IHT relief which is what we are talking about came in in the early 1980s.

I think you have missed my point: 100% relief on IHT for farmland may have been introduced in the 1980s, but the wealthy at that point could evade IHT by putting their assets into trust: they had no extra incentive to buy any more farmland than they already owned as it made no difference to their tax position.

When the tax treatment of trusts changed in 2006, suddenly farmland is one of the very few assets you can own that you can pass onto your heirs tax free & so the wealthy (& moderately weathly) start buying it in enough size to move the market significantly.

That’s the argument I’m making. It seems a plausible one?

Ah I see. I agree. But in that case deal with that directly by having tax rules specifically for those investors. We have already mentioned grandfathering. It is not difficult unless, like TSE, you have an abiding hatred of farmers.

Fake news.

I don’t hate farmers, I hate tax dodgers.

So because you hate tax dodgers you support a policy that will not penalise tax dodgers but will attack farmers.

I agree, the rate should be the 40% IHT rate that everyone else has to pay on their assets. None of this mealy-mouthed 20% nonsense.

And goodbye to all family owned businesses in Britain. Nice one.

Incidentally, family owned businesses are going to be hit with a 20% IHT as well, but no one seems to have clocked this yet.

Possibly because the vast majority of “family-owned” businesses are much smaller than the exemption threshold of £1million?

They'll have a way better profit/ROI/EBIDTA than any farm with a similar size balance sheet.

Yes - because the current price of their assets are not over inflated due to their previous use as a tax avoidance scheme.

In reality farm land shouldn't be that expensive - but it would require changing a few things in ways would really cause farmers to scream. One of which would be for housing lands to be allocated by councils with the council getting most of the increase in value...

I did some sums on this a few threads back,

The extra land needed for even 2 million additional homes won't particularly touch the sides of the UK's current agricultural land.

Especially if we build flats like a normal European country, rather than plastering the place with "shitty chateaus".

Before I start my work day... I just wanted to chip in very briefly on the IHT and farms issue.

When I was a fund manager, two of my older colleagues bought farms. Partly this was because they were obsessive fans of shooting small birds out of the sky ("the humane harvesting of organic free range produce" claimed one). But mostly it was to enable them to take advantage of the inheritance tax break. This will - of course - have pushed up the price of farmland, because people like my colleagues will have acquired farms solely for tax reasons.

I am not a fan of exemptions. Why should passing on a shoe shop to one's daughter be subject to inheritance tax, but not a a corn field? And why should a town house be subject to tax, but a farm house be not.

On the other hand, inheritance tax is easily dodged by the wealthy and the well prepared. The use of trusts, gifts, and ensuring assets are held by corporate bodies is such that if you don't want to pay IHT, you don't need to.

I would therefore abolish it, and replace it with a very small (say 0.1%) gross assets levy.

As we need family farms for our food.

Labour could have kept the exemption for 3 generations or more of family farmers but refused as it is a measure of socialist class war

I don't understand.

Is corn from a family owned farm different to corn from a farm owned by a company?

Yes. Under a microscope you can the see the Big Pharma bar-code on the company corn.