Thank you for watching, to see more of our work visit: ifs.org.uk/taxlab Timecodes: 00:00 Introduction 2:01 What is inheritance tax 4:23 What do other countries do? 6:40 Why is inheritance tax unpopular? 10:30 Threshold freezes 13:55 Changes to treatment of pensions 19:52 Farms 24:22 How many farmers will this affect? 27:40 Impact on family farms 33:20 Changes to business reliefs 35:28 Impact on businesses 41:30 Inheritance tax avoidance 45:36 Conclusion
I look forward to you having a farming discussion with, for example Harry Metcalf, - don't just sit there talking in a bubble, speak to those farmers competent enough to discuss the minutia of finances, instead of talking past one another, and publish the meeting for us all to see.
I think this discussion missed the point that farmers make use of BPR a great deal, not just APR. That is one of the reasons why the Treasury’s figures are so far out.
Helen made an argument about distorting the ownership of businesses. However, reducing APR and BPR relief will actually the most powerful factor distorting the ownership because it will mean that companies that are on the stock exchange or owned by private equity have a massive advantage over family businesses. Family businesses will suffer losing a significant chunk of their capital every generation. Public businesses and those owned by private equity will not suffer losing a chunk of their capital every 20 to 30 years. Reducing APR and BPR relief is unfair on family businesses.
It seems to be a bit of a bizarre argument that farmers and other business owners can just plan around this. If there are ways to plan around it, then what is the point in making these changes? It is only going catch out those who are too elderly or too sick to have time to do the appropriate planning. In other words, this becomes a tax on the frail. One solution would be to delay the introduction of these changes for seven years. This could be a convenient way for the government to escape from whole problem in any case, rather than making an embarrassing U-turn.
IHT raises so little, causes so much grief, is totally pointless with so many reliefs which just funds a tax planning industry. Distorting farmland prices etc Just abolish it and save everyone wasting time, HMRC can spend what little resource of the regular set of taxes. Apply CGT at some rate or set of rates, indexed for inflation. Stop wasting time & energy.
Sadly, the government very foolishly ruled out taxes on the major taxes. I am a "working person " and would prefer 1% tax on the basic rate and reverse the Tory £20bn tax cut, on condition that we invest in growth and scrap Triple lock and Right to Buy.
@@bob1234881 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third... The three generation curse. It is just stochastic who is rich at any particular time.
We can debate whether it is more or less than 500 farms a year that will be affected. However, I do not understand this argument beloved by the government that only X number will be affected, so therefore it’s okay. Is it okay to cause potentially 500 farms to be made unviable each year? Let’s say, it’s only 100. Is that okay? Let’s say (like the National Farmers’ Union) that it will be more. Would 1,000 farms being made unviable each year be okay? Whatever the number is, I don’t see how a policy that raises so little money can be justified by saying that it will only destroy X number of farms per year.
The overall effective rate on these family businesses will often be higher than 20%. When it comes to paying the IHT tax bill it will probably be necessary to take money out of the business in order to pay the bill. This is likely to give rise to dividends tax, CGT, or both of those. Overall, the loss to the family business may be in the ballpark of 40% of its value.
The money that needs to be raised isn't going to be taken from a single policy change, there are dozens of changes that all contribute, including IHT. I'm not really sure what your point is...? Do you think they'll just raise all funds from NI or VAT or something? 😕
Yes: it's ideological. Some ideology like "let's make the tax system make sense, let's make the economy more efficient, and let's crack down on tax avoidance."
It appears the Labour government have redesigned the inheritance tax exemptions re agricultural relief as an attack upon rural Britain who have little understanding of the impact , as per the recent DEFRA intervention to the Treasury, because the assets are not often realised by those who own / inherit them and it’s not only the farmer affected but those businesses who are dependent upon farming, re machinery dealers and agricultural agriculture merchants. Also the figures of who will be affected are distorted as per all the inheritance tax figures because the thresholds are being frozen whilst the assets are increasing in value, the stealth tax approach which political parties are now taking. The inheritance exemption for agriculture was brought in because the margins on the value of their assets were so low it was only families and their emotional attachment to the asset who would continue to run a business with such poor returns, family farms are inefficient because they often take an income which is relatively low, margin on a 500 acre farm is likely to be just over 50k when the assets are in excess of 6-7 million. It will also not affect those who it is claimed the changes are targeting re car journalists and vacuum manufacturers because they will employ tax avoidance measures which is why they bought agricultural land in the first place. Perhaps those wealthy landowners affected should declare themselves to be a monarch of their land and avoid tax like the Duchy estates, but that’s an altogether separate question which should be debated if the country needs wealthy individuals to pay more tax!!
This all seems to make a very good case for abolishing IHT altogether or at the very least having it at a very low rate (say 5-10%) and abolishing the exemptions. I also take exception to the panel glibly stating that "it's only a few hundred people who will be affected". I am not a farmer, but I was brought up in a farming community. If I were one of those farmers, getting up at the crack of dawn to look after my animals, working 7 days a week, 52 weeks a year, struggling to keep my family farm afloat, hearing 3 highly educated individuals on a secure salary telling me that having to sell off the farm to pay IHT is OK because we're inefficient would really p*** me off! A bit of humility please! Economists considering only the big picture, and politicians who only care about issues that affect a large part of the electorate are conveniently forgetting the impact on the individuals involved. If you are one of those affected you must be in despair that so few of those in power or positions of influence actually care about you as an individual. The same comments apply about owners of family businesses built up over the generations. Politicians and those providing them with advice don't seem to care about the impact of their policies on the "little people". Paul, please remember the effect of policies on the individual. I'm sorry about the rant, as I enjoy most of the content of your output from IFS. Much of it makes great sense and has much to recommend it. But please remember that an economy is made up of and is sustained by the efforts of all those people "grafting at the coalface"!
Spot on, a lot of the discussion was based on cold calcius. Of those 'few' farming estates affected every year ...up to 500 it is likely to be devastating so over 10 years that's 5000 viable farming businesses torn apart. No doubt tax planning could help and certainly complicate things, but will not help those older or infirm who will not have time to take advantage of the 7 year rule bearing in mind the farming population has a very high age demographic. For a dedicated farmers son or daughter paying this tax amounts to having to buy a burden because your income is likely be below the repayment charges of the tax.
David questioned why people receive IHT mitigation on ownership of AIM shares, but perhaps it is better to see it from the point of view of the need to support small British companies. We have SEIS supporting seed funding of companies, EIS and VCT for early-stage funding, and then for those that make it to IPO there are incentives to invest in AIM shares (IHT relief and exemption from stamp duty). From that point of view, the IHT relief on AIM shares makes a lot of sense and it is shame that it has reduced from full relief as this will result in less investor support for capital raising due to reduced incentive.
I run a small private business that will need to pay inheritance tax. So if I die the only option is to close the business if my children can’t find a buyer to fund the inheritance tax. What happens to the employee jobs.
It's only recently pensions were a vehicle for "avoiding" IHT. The budget removed this IHT loophole for people who had probably been "middle income" earners but the loopholes for the "really high earners / rich " remain. It doesn't make a huge amount of sense.
Paul says that as many assets as possible should be treated similarly by IHT. Agreed. It makes sense for APR and BPR to be treated in the same way. (NB farmers use BPR a lot.) Any resolution to the farmers’ complaints must also apply to other family businesses so the benefits are spread evenly. If agricultural assets were to get a better deal, then even more money will flow across to those.
Thoughtful discussion as always. I know it's a cliche but this stuff should really be taught in schools. It's frustrating how often politicians have to make inefficient decisions just to appease a poorly educated population.
I understand that a member of the IFS was the author of removing the IHT relief as he didn't believe in families running farms. Is that gentleman aware that one of the biggest failures of Communist Russia was the state owned agriculture? Is that gentleman so happy that UK food security can be compromised and if so what exactly is his agenda in the long run?
Business relief is likely to have a much larger impact on the employees of that business if the inheritance tax bill cannot be paid without selling the business
IHT has needed an overhaul for a long time, so that everyone is treated fairly. I always recall covering the 5th Duke of Westminster who died in 1989, his estate was valued in excess of 5 billion but was only valued at 5 million for IHT. This was because of the large value of property held in trusts and the woodlands exemption. His successors have also benefited from this which seems inequitable. That’s without considering that not all wealth is earned by all, some wealth has been directly bequeathed from the monarchy to families, in lieu of their allegiance. The recent change to incorporate DC pensions also seems inequitable without considering the treatment of the different assets. Those in or preparing for retirement use pension pots to fund their living, with the inherent associated investment risks, whereas illiquid assets such as property are treated the same for IHT. A banding for each seems more equitable.
It is suggested that the farmers and other small business owners just use insurance to protect themselves. Unfortunately, paying such insurance until the day one dies is extremely expensive. Logically, the premiums paid by all those business owners are going to exceed what the insurance companies ever pay out. This is not a solution to the inheritance tax problem that they will face. Overall, it’s just a way for them to prepay the IHT years in advance and lose interest on all the money that they have given to the insurance companies as premiums in advance of their deaths.
I think they really underplayed the upcoming increase in the percentage of estates that will pay inheritance tax in future. The freezing of thresholds (yet again!) is one big reason but they didn’t really quantify the impact of the (understandable) inclusion of DC pots inside estates. The previously quoted “only 4% of estates pay” was superseded by the Chancellor who quoted 6% of estates paying in the latest figures. I suspect the number will be close to 20% by the end of this decade. In the South, house prices will raise this even further……
IHT would be far more digestible if it wasn’t set at a punitive 40%. So,keep the nil rate band/resident nil rate band, and make IHT 10% for everyone NO EXCEPTIONS! Easy. 👍🏻
Instead of the difficult and sometimes hard work of being creative and growing new industries, they attack heritage existential industries. The weak budget is obviously flawed. the new list: no families, no farmers, no food, no future.
There is one very easy change that would make IHT seems much less unfair that you didn't mention. Currently HMRC demands you pay your IHT tax bill within 6 months of the date of death. If you don't, then interest is charged. Having just gone through the process, it would feel much fairer if this time limit was removed and instead the tax is payable at the point probate is granted. The grant can then be tied to the tax being deposited. Currently probate can take a year or more, and without it there are restrictions of what you can do with inherited assets (including restrictions on selling them to help pay the tax bill!)
As usual from the IFS. They do their best to appear neutral, but in the end socialist tendencies emerge by not fully exploring the pro-business wealth-creator perspective.
Can someone please talk about the biggest exception to the inheritance tax, being the monarch. The British people should demand that the monarch pays inheritance tax like the rest, the broadest shoulders…
At 24 minutes, the discussion about farms misses the major point that farmers are cash-poor and they cannot pay the tax due in barrow loads of soil and "fertiliser".... So, farms will have to be sold. Farms will accumulate in large conglomerate farms.... What could possibly go wrong with that? Thank you for raising the cash matter later in your discussion. Why is the government taxing death?
Posted this last time but posting again because I'd love an answer! Please could you do an episode discussion Land Value Tax? Every time I hear an economist talk about it they seem to go all moon eyed, wax lyrical about how amazing that would be and what a shame it will never happen, and then move on to something else. Is it really that great and, if so, why haven’t we got one?
I have been an avid watcher of this channel and normally find it very informative and clears up the lies that politicians of both sides make. Today I feel that you have either deliberately or by naivety have mis-understood or formed a very biased narrative about farming. Firstly you quote figures comparing farmers affected to the general public, and deaths being only 0.1% of total deaths, surely you should be comparing deaths of farmers to people paying inheritance tax and I am certain that figure will not be 0.1%. The NFU have said this will affect 70,000 farms, which is the majority of farms in the UK, show me any other industry where the majority will need to pay inheritance tax. I suspect you won’t unless you count hedge fund managers as an industry, and even they will not pay it one way or another. You talk about emotional attachment to the land and compare it to houses in London. Again show me the percentage of home owners who have lived in the same home for 5 or more generations. I suspect there will be extremely few, whereas farming is seen as a multi generational occupation. Currently farming is massively more regulated than virtually any other industry, we can buy OSR from the continent but farmers in the UK aren’t allowed to sow the same seed. Farming is not like other industries, if it were we would have no hedges and there would be large fences keeping people out. I am sure you have watched clarkson’s farm and can see all the issues farming has had to put up with and this government is only making it worse. I hat inheritance tax, for me it is morally bankrupt, but I can accept it if our apartment in Convent Gardens has gone up by several hundred percent, but taxing farmers who have had their farm for generations and had hoped their future generations will farm the land is more than morally bankrupt.
Thank you for an informative presentation. A few points on the inheritance tax changes to defined contribution pension pots. First, you made no mention about the fact that for many people pots have already been taxed at the rate of 55% on the surplus above the previous limit when the pension was first crystallized (until Hunt recently changed the rules). So there are effectively, for those pensioners who have already paid income tax on crystallization, on the surplus above the limit, and survive beyond the age of 75 years , three means by which HMRC will levy tax i.e. on crystallization, on drawdown, and on their estate upon death when their heirs pay income tax at their marginal rates. Second, given for almost all pensioners in their sixties there is (without a diagnosis of terminal illness) actuarially a very wide range of possible ages at death, almost all will drawdown at a rate that it is likely to leave a substantial residue remaining upon death. Third, the Chancellor described the change to pension pots as closing a "loophole". It was not a loophole as it was explained by Osborne et al, at the outset, that being able to pass on the residue on the pot was one of the few advantages of having a defined contribution pension instead of a defined benefit pension. As we know most people outside the public sector were then are still not now able to join a defined benefit scheme.
You can slow the playback speed in TH-cam options if you're struggling to keep up. I actually quite like it when there's somebody on that speaks faster, I don't have to increase playback when listening then :D
Can someone please talk about the biggest exception to the inheritance tax, being the monarch. The British people should demand that the monarch pays inheritance tax like the rest, the broadest shoulders…
Thank you for watching, to see more of our work visit: ifs.org.uk/taxlab
Timecodes:
00:00 Introduction
2:01 What is inheritance tax
4:23 What do other countries do?
6:40 Why is inheritance tax unpopular?
10:30 Threshold freezes
13:55 Changes to treatment of pensions
19:52 Farms
24:22 How many farmers will this affect?
27:40 Impact on family farms
33:20 Changes to business reliefs
35:28 Impact on businesses
41:30 Inheritance tax avoidance
45:36 Conclusion
I look forward to you having a farming discussion with, for example Harry Metcalf, - don't just sit there talking in a bubble, speak to those farmers competent enough to discuss the minutia of finances, instead of talking past one another, and publish the meeting for us all to see.
@@41istair I agree. There is not enough representation of all the counterarguments to the APR/BPR relief reduction in this discussion.
I think this discussion missed the point that farmers make use of BPR a great deal, not just APR. That is one of the reasons why the Treasury’s figures are so far out.
Helen made an argument about distorting the ownership of businesses. However, reducing APR and BPR relief will actually the most powerful factor distorting the ownership because it will mean that companies that are on the stock exchange or owned by private equity have a massive advantage over family businesses. Family businesses will suffer losing a significant chunk of their capital every generation. Public businesses and those owned by private equity will not suffer losing a chunk of their capital every 20 to 30 years. Reducing APR and BPR relief is unfair on family businesses.
Yes!
It seems to be a bit of a bizarre argument that farmers and other business owners can just plan around this. If there are ways to plan around it, then what is the point in making these changes? It is only going catch out those who are too elderly or too sick to have time to do the appropriate planning. In other words, this becomes a tax on the frail. One solution would be to delay the introduction of these changes for seven years. This could be a convenient way for the government to escape from whole problem in any case, rather than making an embarrassing U-turn.
IHT raises so little, causes so much grief, is totally pointless with so many reliefs which just funds a tax planning industry. Distorting farmland prices etc Just abolish it and save everyone wasting time, HMRC can spend what little resource of the regular set of taxes. Apply CGT at some rate or set of rates, indexed for inflation. Stop wasting time & energy.
Sadly, the government very foolishly ruled out taxes on the major taxes. I am a "working person " and would prefer 1% tax on the basic rate and reverse the Tory £20bn tax cut, on condition that we invest in growth and scrap Triple lock and Right to Buy.
But then that will mean generational gip will increase to those that get given vs those that don't.
@@bob1234881 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third... The three generation curse. It is just stochastic who is rich at any particular time.
The best comment ever, well done!
We can debate whether it is more or less than 500 farms a year that will be affected. However, I do not understand this argument beloved by the government that only X number will be affected, so therefore it’s okay.
Is it okay to cause potentially 500 farms to be made unviable each year? Let’s say, it’s only 100. Is that okay? Let’s say (like the National Farmers’ Union) that it will be more. Would 1,000 farms being made unviable each year be okay? Whatever the number is, I don’t see how a policy that raises so little money can be justified by saying that it will only destroy X number of farms per year.
The overall effective rate on these family businesses will often be higher than 20%. When it comes to paying the IHT tax bill it will probably be necessary to take money out of the business in order to pay the bill. This is likely to give rise to dividends tax, CGT, or both of those. Overall, the loss to the family business may be in the ballpark of 40% of its value.
If the change to inheritance tax isn't going to raise massive amounts, then it must be an ideological decision on the part of the government.
The money that needs to be raised isn't going to be taken from a single policy change, there are dozens of changes that all contribute, including IHT. I'm not really sure what your point is...? Do you think they'll just raise all funds from NI or VAT or something? 😕
@@jme_athe point I believe they are making is that the Labour Party is just applying the tax as a punitive tax because they hate family farms
Yes: it's ideological. Some ideology like "let's make the tax system make sense, let's make the economy more efficient, and let's crack down on tax avoidance."
Yes, the ideology is FAIRNESS.
@@geoffnewman3109 It is definitely Double Taxation that can not be defended by one of the principals (as they are already deceased); is this fair ?
It appears the Labour government have redesigned the inheritance tax exemptions re agricultural relief as an attack upon rural Britain who have little understanding of the impact , as per the recent DEFRA intervention to the Treasury, because the assets are not often realised by those who own / inherit them and it’s not only the farmer affected but those businesses who are dependent upon farming, re machinery dealers and agricultural agriculture merchants.
Also the figures of who will be affected are distorted as per all the inheritance tax figures because the thresholds are being frozen whilst the assets are increasing in value, the stealth tax approach which political parties are now taking.
The inheritance exemption for agriculture was brought in because the margins on the value of their assets were so low it was only families and their emotional attachment to the asset who would continue to run a business with such poor returns, family farms are inefficient because they often take an income which is relatively low, margin on a 500 acre farm is likely to be just over 50k when the assets are in excess of 6-7 million.
It will also not affect those who it is claimed the changes are targeting re car journalists and vacuum manufacturers because they will employ tax avoidance measures which is why they bought agricultural land in the first place. Perhaps those wealthy landowners affected should declare themselves to be a monarch of their land and avoid tax like the Duchy estates, but that’s an altogether separate question which should be debated if the country needs wealthy individuals to pay more tax!!
This all seems to make a very good case for abolishing IHT altogether or at the very least having it at a very low rate (say 5-10%) and abolishing the exemptions.
I also take exception to the panel glibly stating that "it's only a few hundred people who will be affected". I am not a farmer, but I was brought up in a farming community. If I were one of those farmers, getting up at the crack of dawn to look after my animals, working 7 days a week, 52 weeks a year, struggling to keep my family farm afloat, hearing 3 highly educated individuals on a secure salary telling me that having to sell off the farm to pay IHT is OK because we're inefficient would really p*** me off! A bit of humility please!
Economists considering only the big picture, and politicians who only care about issues that affect a large part of the electorate are conveniently forgetting the impact on the individuals involved. If you are one of those affected you must be in despair that so few of those in power or positions of influence actually care about you as an individual.
The same comments apply about owners of family businesses built up over the generations. Politicians and those providing them with advice don't seem to care about the impact of their policies on the "little people". Paul, please remember the effect of policies on the individual.
I'm sorry about the rant, as I enjoy most of the content of your output from IFS. Much of it makes great sense and has much to recommend it. But please remember that an economy is made up of and is sustained by the efforts of all those people "grafting at the coalface"!
Spot on, a lot of the discussion was based on cold calcius. Of those 'few' farming estates affected every year ...up to 500 it is likely to be devastating so over 10 years that's 5000 viable farming businesses torn apart. No doubt tax planning could help and certainly complicate things, but will not help those older or infirm who will not have time to take advantage of the 7 year rule bearing in mind the farming population has a very high age demographic.
For a dedicated farmers son or daughter paying this tax amounts to having to buy a burden because your income is likely be below the repayment charges of the tax.
David questioned why people receive IHT mitigation on ownership of AIM shares, but perhaps it is better to see it from the point of view of the need to support small British companies. We have SEIS supporting seed funding of companies, EIS and VCT for early-stage funding, and then for those that make it to IPO there are incentives to invest in AIM shares (IHT relief and exemption from stamp duty). From that point of view, the IHT relief on AIM shares makes a lot of sense and it is shame that it has reduced from full relief as this will result in less investor support for capital raising due to reduced incentive.
I run a small private business that will need to pay inheritance tax. So if I die the only option is to close the business if my children can’t find a buyer to fund the inheritance tax. What happens to the employee jobs.
It's only recently pensions were a vehicle for "avoiding" IHT. The budget removed this IHT loophole for people who had probably been "middle income" earners but the loopholes for the "really high earners / rich " remain. It doesn't make a huge amount of sense.
Paul says that as many assets as possible should be treated similarly by IHT. Agreed. It makes sense for APR and BPR to be treated in the same way. (NB farmers use BPR a lot.) Any resolution to the farmers’ complaints must also apply to other family businesses so the benefits are spread evenly. If agricultural assets were to get a better deal, then even more money will flow across to those.
Thoughtful discussion as always. I know it's a cliche but this stuff should really be taught in schools. It's frustrating how often politicians have to make inefficient decisions just to appease a poorly educated population.
I understand that a member of the IFS was the author of removing the IHT relief as he didn't believe in families running farms. Is that gentleman aware that one of the biggest failures of Communist Russia was the state owned agriculture? Is that gentleman so happy that UK food security can be compromised and if so what exactly is his agenda in the long run?
Business relief is likely to have a much larger impact on the employees of that business if the inheritance tax bill cannot be paid without selling the business
Especially if you can’t find a buyer
IHT has needed an overhaul for a long time, so that everyone is treated fairly.
I always recall covering the 5th Duke of Westminster who died in 1989, his estate was valued in excess of 5 billion but was only valued at 5 million for IHT. This was because of the large value of property held in trusts and the woodlands exemption. His successors have also benefited from this which seems inequitable. That’s without considering that not all wealth is earned by all, some wealth has been directly bequeathed from the monarchy to families, in lieu of their allegiance.
The recent change to incorporate DC pensions also seems inequitable without considering the treatment of the different assets. Those in or preparing for retirement use pension pots to fund their living, with the inherent associated investment risks, whereas illiquid assets such as property are treated the same for IHT. A banding for each seems more equitable.
It is suggested that the farmers and other small business owners just use insurance to protect themselves. Unfortunately, paying such insurance until the day one dies is extremely expensive. Logically, the premiums paid by all those business owners are going to exceed what the insurance companies ever pay out. This is not a solution to the inheritance tax problem that they will face. Overall, it’s just a way for them to prepay the IHT years in advance and lose interest on all the money that they have given to the insurance companies as premiums in advance of their deaths.
Yes, and also taking money out of the business to pay the premiums is likely to give rise to dividends tax and/or CGT.
I think they really underplayed the upcoming increase in the percentage of estates that will pay inheritance tax in future. The freezing of thresholds (yet again!) is one big reason but they didn’t really quantify the impact of the (understandable) inclusion of DC pots inside estates. The previously quoted “only 4% of estates pay” was superseded by the Chancellor who quoted 6% of estates paying in the latest figures. I suspect the number will be close to 20% by the end of this decade. In the South, house prices will raise this even further……
IHT would be far more digestible if it wasn’t set at a punitive 40%. So,keep the nil rate band/resident nil rate band, and make IHT 10% for everyone NO EXCEPTIONS! Easy. 👍🏻
Instead of the difficult and sometimes hard work of being creative and growing new industries, they attack heritage existential industries.
The weak budget is obviously flawed.
the new list: no families, no farmers, no food, no future.
There is one very easy change that would make IHT seems much less unfair that you didn't mention. Currently HMRC demands you pay your IHT tax bill within 6 months of the date of death. If you don't, then interest is charged. Having just gone through the process, it would feel much fairer if this time limit was removed and instead the tax is payable at the point probate is granted. The grant can then be tied to the tax being deposited. Currently probate can take a year or more, and without it there are restrictions of what you can do with inherited assets (including restrictions on selling them to help pay the tax bill!)
As usual from the IFS. They do their best to appear neutral, but in the end socialist tendencies emerge by not fully exploring the pro-business wealth-creator perspective.
Can someone please talk about the biggest exception to the inheritance tax, being the monarch. The British people should demand that the monarch pays inheritance tax like the rest, the broadest shoulders…
At 24 minutes, the discussion about farms misses the major point that farmers are cash-poor and they cannot pay the tax due in barrow loads of soil and "fertiliser".... So, farms will have to be sold. Farms will accumulate in large conglomerate farms.... What could possibly go wrong with that?
Thank you for raising the cash matter later in your discussion.
Why is the government taxing death?
Posted this last time but posting again because I'd love an answer! Please could you do an episode discussion Land Value Tax? Every time I hear an economist talk about it they seem to go all moon eyed, wax lyrical about how amazing that would be and what a shame it will never happen, and then move on to something else. Is it really that great and, if so, why haven’t we got one?
I have been an avid watcher of this channel and normally find it very informative and clears up the lies that politicians of both sides make. Today I feel that you have either deliberately or by naivety have mis-understood or formed a very biased narrative about farming.
Firstly you quote figures comparing farmers affected to the general public, and deaths being only 0.1% of total deaths, surely you should be comparing deaths of farmers to people paying inheritance tax and I am certain that figure will not be 0.1%.
The NFU have said this will affect 70,000 farms, which is the majority of farms in the UK, show me any other industry where the majority will need to pay inheritance tax. I suspect you won’t unless you count hedge fund managers as an industry, and even they will not pay it one way or another.
You talk about emotional attachment to the land and compare it to houses in London. Again show me the percentage of home owners who have lived in the same home for 5 or more generations. I suspect there will be extremely few, whereas farming is seen as a multi generational occupation.
Currently farming is massively more regulated than virtually any other industry, we can buy OSR from the continent but farmers in the UK aren’t allowed to sow the same seed.
Farming is not like other industries, if it were we would have no hedges and there would be large fences keeping people out.
I am sure you have watched clarkson’s farm and can see all the issues farming has had to put up with and this government is only making it worse.
I hat inheritance tax, for me it is morally bankrupt, but I can accept it if our apartment in Convent Gardens has gone up by several hundred percent, but taxing farmers who have had their farm for generations and had hoped their future generations will farm the land is more than morally bankrupt.
"The NFU have said this will affect 70,000 farms" this new Labour target is significant. How about the businesses? is IFS having trouble with zeroes ?
Would the family business perform better if it were sold to multiple shareholders each sitting below the £325,000 threshold, each avoiding IHT?
How will family businesses be valued for IHT, range of values could be massive and controversial???
The HMRC do it based on standard valuations.
@@PaulNaybourlike what
It would have seemed fairer to society if the Gov had cut Foreign Aid and the cost of illegal immigration
"I struggle with my zeros" - Director of the Institute for Fiscal Studies
Thank you for an informative presentation. A few points on the inheritance tax changes to defined contribution pension pots. First, you made no mention about the fact that for many people pots have already been taxed at the rate of 55% on the surplus above the previous limit when the pension was first crystallized (until Hunt recently changed the rules). So there are effectively, for those pensioners who have already paid income tax on crystallization, on the surplus above the limit, and survive beyond the age of 75 years , three means by which HMRC will levy tax i.e. on crystallization, on drawdown, and on their estate upon death when their heirs pay income tax at their marginal rates. Second, given for almost all pensioners in their sixties there is (without a diagnosis of terminal illness) actuarially a very wide range of possible ages at death, almost all will drawdown at a rate that it is likely to leave a substantial residue remaining upon death. Third, the Chancellor described the change to pension pots as closing a "loophole". It was not a loophole as it was explained by Osborne et al, at the outset, that being able to pass on the residue on the pot was one of the few advantages of having a defined contribution pension instead of a defined benefit pension. As we know most people outside the public sector were then are still not now able to join a defined benefit scheme.
Your ownership distortion argument only stands up if the IHT threshold is zero.
Saw you on Damo's channel, Paul. And it's brought me here !
you forgot to discuss age 75 at the start of this < 20 mins
As always a great one , thank you
The people get the Government they deserve. Britain, you voted for a taste of Socialism after 12 years, so enjoy!
I don't understand the point if not paying tax and tax rebates on pensions, it seems to just cause issues.
Why does the lady speak so fast, she's barely audible
You can slow the playback speed in TH-cam options if you're struggling to keep up. I actually quite like it when there's somebody on that speaks faster, I don't have to increase playback when listening then :D
It's ok, watching more podcasts like this will help to make you a more well-informed person and allow you to keep pace with experts.
@third7715 Her natural speaking style? It's part of her, let's celebrate her intellect and the excellent content. 👏
Can someone please talk about the biggest exception to the inheritance tax, being the monarch. The British people should demand that the monarch pays inheritance tax like the rest, the broadest shoulders…
@@asgggg3372 Start with Buckingham Palace paying less council tax than a semi in the North of England.