Farmer discontent grows over Labour\u2019s firm IHT position<\/a><\/p>\nMr Bradshaw explained that the government\u2019s much vaunted plan to allow IHT payments to be spread over 10 years would be interest-free only if the first payment was made within six months of a death.<\/p>\n
\u201cTo expect to have probate within six months is completely unrealistic \u2013 especially given the complexity of valuing an agricultural business,\u201d he said.<\/p>\n
This would be complicated by the fact that valuation officers would be under huge pressure, getting to grips with real-life situations involving farm assets, rather than just relying on book valuations.<\/p>\n
\u201cI think this has been hugely underestimated,\u201d said Mr Bradshaw.<\/p>\n
\u201cThe belief that we are going to be able to make the first payment six months after the death \u2013 I just don\u2019t understand how anyone has thought this through and arrived at that as a realistic proposition.\u201d<\/p>\n
Added expense<\/p>\n
Country Land and Business Association policy director Judicaelle Hammond agreed that getting cash out of a business to pay IHT would be difficult without probate, while securing a bridging loan would add cost and complexity.<\/p>\n
Central Association of Agricultural Valuers secretary Jeremy Moody told the committee his organisation was preparing its members to start the process of valuation \u201cas soon as is decently possible after the death\u201d.<\/p>\n
But even if that could be done in six months, once an IHT return was submitted to HMRC for consideration, it was out of everyone\u2019s hands.<\/p>\n
\u201cThat\u2019s where you hit an issue of the capacity for that [return] to be dealt with,\u201d Mr Moody said.<\/p>\n
Forestalling clause<\/p>\n
While charging interest in such circumstances was \u201cunreasonable\u201d, Mr Bradshaw said an even greater issue was the so-called \u201cforestalling clause\u201d.<\/p>\n
This effectively applies the new IHT rules to any transfer of assets that takes place from the date of the last Budget \u2013 30 October 2024 \u2013 rather than when the new legislation is passed on 1 April 2026.<\/p>\n
\u201cIf you\u2019re a younger member of the farming industry, generally you have the ability to plan,\u201d said Mr Bradshaw.<\/p>\n
\u201cBut if you are somebody who does not expect to live for seven years, if you are somebody who is terminally ill, the forestalling clause has deliberately trapped you. That feels targeted and is much more difficult to forgive.\u201d<\/p>\n
Historic data<\/p>\n
All three witnesses agreed that the government\u2019s estimates of just 550 farms a year being affected by IHT was a massive underestimate, explained in part by its use of historic data and valuations.\u00a0<\/p>\n
Affordability was another issue, with Mr Moody suggesting the average IHT bill would be equivalent to \u00a3200-\u00a3300\/acre annual rent on a 10-year payment basis.<\/p>\n
Meanwhile, outside investors with multimillion-pound bank balances would still find farmland a massively attractive investment to cut their IHT dues.<\/p>\n
\u201cThe new system will hit those it aims to protect, and protect those it aims to hit,\u201d said Mr Moody.<\/p>\n
Treasury digs in on inheritance tax<\/p>\n
The exchequer secretary to the Treasury, Daniel Tomlinson, has said government plans to impose 20% inheritance tax on agricultural assets worth more than \u00a31m are both fair and balanced,\u00a0<\/p>\n
Responding to a Westminster Hall debate on the impact of the policy in Northern Ireland, the junior minister insisted the Treasury had listened to the farming industry, but maintained that its policy \u201cis the appropriate one\u201d.<\/p>\n
The provisions for farmers were \u201cgenerous\u201d and \u201cnot seen anywhere else in the IHT system\u201d, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Charging interest on inheritance tax dues and targeting the old and infirm through a \u201cforestalling clause\u201d are two…\n","protected":false},"author":2,"featured_media":251631,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-251630","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/251630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=251630"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/251630\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/251631"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=251630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=251630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=251630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}