What exactly do we Liberal Democrats want from out campaign against the "Family Farm Tax"?
It's important we know, because The Agri Brigade column in the latest Private Eye suggests the government may be about to make some concessions on the issue.
These concessions, the Eye suggests, would raise the Inheritance Tax threshold on farmland from £1m to £5m (so, £10m for a married couple).
This would mean that the tax would not be levied at all on anything that can sensible be called a family farm. At the same time, technical changes would see a higher tax take from larger estates. The proposals are contained in a policy report from the Centre for the Analysis of Taxation.
If this happens, I hope the Lib Dems will declare victory for their campaign and move on to other issues.
However, much of our campaigning has given the impression that we are against inheritance tax on land at all. It's hard to find anything countering that impression on the party's page on the Family Farm Tax – please let me know if you can.
Yet it is the failure to levy inheritance tax on farmland that has caused the problem that page complains about most. That is, that the value of farmland bears little relation to the income that can be generated from farming it.
If we allow farms to be used as a tax shelter, then that will always be the case.
I agree, Jonathan. There are lots of sensible observations about farming on the party's webpage, but it makes no distinction between 'family farmers' and 'agricultural landowners'. Some agricultural landowners are family farmers who need support, but plenty of agricultural land is owned by investors external to farming who are looking to protect capital from tax. The latter need to be taxed heavily, to reduce the incentives for this. I'm afraid this is another example of the party having an insufficient economic analysis.
ReplyDeleteI have always been highly sceptical about the party line on inheritance tax. Many families would love to have a million or two in IHT allowances and 10 years to pay. Instead they have to make do with £340000 and must pay immediately BEFORE they get access to the inheritance at all. So, I would certainly welcome a period of silence on this issue if, as suggested, the government proceeds with a £5million threshold.
ReplyDeleteI agree. IHT and "farmers" or "landowners" has been dealt with very badly by local and national media. Paul Johnson, late of the IFS, had the best analysis on this, and said we need to stimulate the market in agricultural land. Sadly, the government, as usual, has failed to explain its policies.
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