#FamilyFarmTax talking points - a helpful guide: 1. "It's only 500 farms". No, that's APR claims above £1m made in one year, 2021/22. Many more people than that are affected by the rules. The CLA estimated the total number is 70,000 farms. On the Government's own numbers it's about 16,000 (500 x one generation of 32 years). The true figure is that it's likely tens of thousands are affected. 2. "There's a £3m exemption". No, that only applies if both spouses are alive, they can split the farm between them, they amend their wills before dying, both they are their children are in stable marriages (or they are prepared to use complex trust structures). It will not be possible for all couples to achieve this. 3. "Family farms are protected". No, DEFRA says the average family farm is 217 acres. At £11,300/acre that's £2.45m. Together with equipment and a farmhouse, that's likely well over £3m which is the maximum level of the exemption. Farms well below that level are affected and will need to take steps to restructure the way they are organised or face inheritance tax bills when the older generation dies. 4. "How can your income be that low? The price of land must be high because of tax avoiders." The current 100% exemption for land and businesses have applied since 1992. The price of land didn't start to rise significantly until 2005, when the Single Farm Payment was introduced. Tax rules only have a minor affect on land value, which is driven by multiple factors including development, rollover relief, environmental needs, and that they're not making more of it 5. "This only affects the very wealthy and tax avoiders" At one end lifestyle buyers may well be within the £1m exemption per person, at the other the very wealthy can still plan by making gifts. The people who cannot avoid it are family farmers who need to retain access to the farm income. 6. "Wealthy farmers can just pay their fair share of tax" An average farm income is about 1%. Even if you pay over 10 years, the inheritance tax payments will often take all the income, and so part of the farm will need to be sold. This reduces efficiency and makes the farm less viable for the future. What have I missed?

This is a helpful precis of the situation we're currently in and what needs to be done to get out of it. I'm not sure the current Government has the political will or backbench support to tackle these issues, but it's certainly a great opportunity for opposition parties to set out their roadmap to success.

This letter could have been drafted much better. It could have clearly set out that it was a fully voluntary arrangement. It could have confirmed that lack of compliance does not increase the chance of enquiry, but it is likely to reduce the severity and depth as HMRC would be more familiar with your situation. It could have explained the positive steps HMRC is taking to improve taxpayers' experience when enquiries do arise. But instead the choices made by the draftsman imply a sword of Damocles-style "comply or else" situation. That's bad for our tax system, and an opportunity missed. thetimes.com/money/tax/artic…

Really, is this where we’ve got to? Business Asset Disposal Relief used to be Retirement Relief, for people who had worked and built businesses all their lives. It has been hugely eroded back to only £1m of gain per person (from £10m), and the effective rate of relief chipped away too. The message to entrepreneurs is clear - start your business elsewhere. Imagine instead a world where we welcome enthusiastic entrepreneurs and build an inspiring environment to establish and grow businesses from your spare room to multinational global enterprises. How much better a signal would that send that Britain is open for business?

The thought that Gordon Brown, who cheerfully flogged our gold and raided pension funds by withdrawing tax relief, wouldn't have wiped out this wealth fund in a heartbeat, is for the birds.

It's a travesty that Cadburys don't make a Bournville advent calendar.

Honest question - if Jackdaw and Roseband are both green lit, does global fossil fuel consumption increase? If not, then that need would be met from somewhere, so where is the argument that doing so is bad for the environment? Or is the argument that we should deliberately crank fossil fuel prices through supply side restrictions to financially incentivise people to make renewables more viable? Please note none of this is a comment on global decarbonisation, which still seems vital to me.

It doesn’t take a genius to walk through the consequences of this. Any tenant who thinks they have a chance of having a lower rent mandated can go to the tribunal, triggering costs of thousands for the landlord. The tribunal may actually reduce the rent being paid based on what appears to be very limited information. Landlords therefore don’t take that risk. Profit margins narrow and fall away. Landlords sell up because it isn’t worth tying up capital in bricks and mortar, and the private rented sector contracts. Investment in improvements dries up. The experience of renters becomes worse - fewer houses are available and in deteriorating condition. The people who changed the rules get more complaints from renters, and tighten them. The situation spirals. Eventually as the sector is collapsing there is explosive deregulation. Capital comes back into the sector, houses are bought to rent, improved as investment comes in and a broader market develops. Availability and competition reduces rent levels, increases choice and improves quality. The solution to poor quality rentals being available isn’t rent control, it’s to build more houses so tenants can choose to say no to poor quality options. The best situation we can hope for now is to speed-run the above cycle so that we get out of the downward spiral faster. That means a change of attitude of decision-makers (or a change of decision-makers). Labour promised 1.5m new homes and are going to miss that target by miles. The route to a better private rented sector in my view is liberalisation and deregulation of the development market. telegraph.co.uk/money/proper…

"...four people close to the matter said the Treasury had no intention of equalising [CGT] with income tax. One of the people called such the proposal “batshit crazy”, while another pointed to the argument that people would change their behaviour by leaving the UK or delaying sales, resulting in a drop in income for the Treasury." I'm hopeful that this has substance, and that there's no shift in the CGT rate. We really need some stability in the system, and the continual threat of drastic shifts in the tax system is bad for day-to-day business. There is a world where CGT is rebased to 2021, an indexation allowance is brought in and CGT rates are equalised. I'd still personal prefer a taper relief, even one that kicked in after 10 years and ratcheted down to 0% for long term (30 year) gains. But that would have to be at the beginning of a Parliament, not half way through, we are not in that world and we will not be for the foreseeable future. ft.com/content/d63348fb-901d…

As ever, solid work from Dan. I disagree with Dan about downsizing relief. It exists in the legislation already, and when there was 100% relief on AIM shares I didn't see people dumping millions into them to avoid IHT because of the 2-year ownership requirement. A downsizing relief with, say, a 5-year ownership requirement before a property qualifies would seem to adequately address this issue. That deals with the points about people retaining homes that would be sold and fewer people downsizing. It doesn't deal with people moving savings and investments to buy bigger homes which, remains an issue. My view is that this is not an economic decision, which leads it open to criticism about the different measures that could have a great economic impact and Dan goes through those eloquently. It is a choice made by a political party as a statement about what they think is right and what isn't. Everyone is free to agree or disagree as they see fit.

For those suggesting inheritance tax is a tiny minority issue, the IFS report written by Arun Advani (of Centax) and David Sturrock in 2023 said this. A tax impacting 23% of people in London is not niche. ifs.org.uk/publications/refo…

I'm at a loss over where the Chancellor can go in the Budget, other than spending cuts. The pressure from the markets is growing, the pressure on spending is incessant, and the aggressive assumptions from Rachel Reeves about cost savings towards the end of this Parliament have painted him into a corner. Treasury analysis showed that increasing CGT rates isn't going to raise much tax, and might actually cost it. Dan Neidle's analysis is even more downbeat about the potential in that arena now once you account for the impact of the last two budgets and behavioural analysis. If he won't touch income tax, VAT or NIC, and CGT won't raise anything, then what's left. I can't imagine any change in IHT after the utter mess they made with farmers. Some sort of bank levy perhaps? The options seem to be to break a manifesto commitment, or take an ideologically driven step for show that is unlikely to move the dial much. Even if there is an opportunity I've missed, does a Labour party considering re-election really want to drive taxes up every year? It's not a good place to be, but it's where they are.

What would be the loss to the country if we delisted 95% of Grade II properties, and scaled the listing back on half of the Grade I properties? The UK's architecture developed over centuries, with generation after generation adapating, updating and improving (or ruining) buildings. We seem to have locked things in the way they were in 1956 and I don't get the benefit of so many places being listed.

Reform inquiry clears Reform of wrongdoing? I'm not sure that's as persuasive as they might think.

Important point on IHT proposals. We currently have £325k nil rate band and a £175k residential nil rate band per person, £1m per couple. Changing this to £500k per person and an uncapped residential nil rate band would put the policy into effect, and maintain a “downsizing relief” to avoid an incentive to stay in big houses. You’d need a new anti-avoidance measure to avoid someone buying a massive mansion and selling it a week later, but it is perfectly possible to achieve the desired outcome without screwing the residential property market.

Most arguments I see in support of inheritance tax have two prongs: 1. Not many people pay it; and 2. You didn't earn the inheritance yourself. The first doesn't persuade me. A tax doesn't become fair simply because it falls on a minority. The second troubles me much more, because it suggests a particular view of the relationship between the individual, the family and the State that I'm not comfortable with. “You didn't earn it” assumes that the relevant unit is always the individual. Your parents earned their property, you didn't. Therefore there is nothing objectionable about the State intervening when property passes from one to the other. I can't accept that underlying premise The family is much more than a collection of economically independent individuals who happen to be related. People work, save, build businesses, improve farms and homes, and make huge sacrifices for their families. Generations care for one another and families undertake projects which extend well beyond an individual lifetime. The State should protect the sphere of family life, not seek to disrupt or dominate it. Intervention in a family requires a very high degree of justification. Where someone is being harmed, abused or exploited, of course the State should intervene. But the presumption should be that peaceful families can order their own affairs, care for one another and pass what they have built from one generation to the next. That is why “you didn't earn it” makes me so uncomfortable as a justification for inheritance tax. It treats the death of a family member as though property has somehow become ownerless and properly defaults to the State. If you want to say "it's unfair some people are born into families who have more wealth" then say it, and take the argument on its merits. The State needs tax to exist, and it has to gain it from somewhere. But the fundamental point underlying this is whether the State is justified in intervening in the peaceful affairs of the family? We don't belong to the State. Our families don't exist by its permission. And our property shouldn't pass to it when we die. The presumption should be that families are left alone. If anyone wants to override that principle, it needs to be justified.

A predictably excellent thread from Dan. I don't entirely share his view that the Treasury will disregard CGT changes - if there's one thing they have shown over the last two years it's their ability to ignore behavioural change and second order impacts in their analysis of tax changes. There's also a comment in the report that there aren't studies that show people will defer gains on the off-chance of a new Government changing the rules. I am confident that if you asked 100 entrepreneurs whether they would delay selling their business by 24 months because the opposition party is promising to halve the tax rate (47% down to 24%), then almost everyone would give a positive response. Not everybody - not every transaction could or should be deferred commercially - but those that do have the capability to delay things would do so. And as a result the wheels of the market would turn more slowly, deals would dry up or fall over as the net price doesn't work any more and generally the broader economy takes a hit as a result. Other taxes fall as a slice of economic activity slows to a crawl. I would prefer a 'better' CGT system that incorporates inflation protection, a reward in a lower tax rate for those risk-takers who are vital in driving growth, a higher, income-tax equivalent rate for short term gains and a taper to zero CGT over 20 years to encourage long term investment (and deal with the ridiculousness of having to keep records for 3, 4, 5 or more decades).

My first school job was in MacDonalds, and I worked on the tills. We took orders and spoke to people. I stayed working there throughout school holidays, and then moved on to a higher paid job, and again, and again. The first rung on the employment ladder is a learning experience that increases your value to your next employer. The customer experience of ordering fast food from a touch screen is objectively worse than ordering from a person. It doesn't work well, it tries to upsell you too much, and the whole experience is bland and vaguely unpleasant. Fast food chains have given customers a worse experience because they can't justify investing in people to create a better one. The increased costs of employing people into their first jobs are making the world a more miserable place.