The UK Budget Oct 2024.... are farmers not fuming?

[RedHand88]

Is this when the farmer dies?

Can he, when alive, not just write a will? Or does this involve a tax, regardless of who and when the will is made?

Don't think a will changes anything.

Someone had said it can be gifted 7 years before the original owner dies without a tax burden but not sure if thats true.

[imtommygunn]

That 7 year thing is standard I think. Non farmers do that with houses so they don't have to pay for their nursing homes etc.

[TabClear]

That 7 year thing is standard I think. Non farmers do that with houses so they don't have to pay for their nursing homes etc.

Fairly standard estate planning is to transfer assets to children as the IHT tapers down and disappears if you survive 7 years. It has to be a gift without reservation though, i.e. you cant transfer your house to your kids and then live in it rent free as the HMRC will look through that.

Trusts are a way of reducing IHT as well that give a bit more flexibility and could be useful for some farmers after the Budget. However, they are more complex to set up and will need legal structuring.

One thing that has not been mentioned too much is  bringing pensions "in scope" for inheritance tax. Currently, private pensions are excluded from inheritance tax. Now pension pots  will now be included in IHT calculations from 2027 so the pension pot will get added to property and shares as part of potentially chargeable assets using up the allowance.

Most of these measures will affect "wealthier" people but it will hit farmers badly as you have to have the cash to pay the tax.

[Tony Baloney]

You'd be better spending every penny before you die. The boy whp never worked a day in his life gets a free room in a nursing home next to someone who worked all their life and had to sell everything to pay for their room. Live rich and die broke.

[marty34]

You'd be better spending every penny before you die. The boy whp never worked a day in his life gets a free room in a nursing home next to someone who worked all their life and had to sell everything to pay for their room. Live rich and die broke.

True...or stash the cash!

I suppose all this comes down to sensible planning ahead.

I read and hear of loads of cases where eldery farmers leave no will or leave it to one person and the rest of family challenge it in the courts.  Then the family fall out and it causes a big split.

Not nice for anyone.

[Milltown Row2]

You come in penny-less, leave penny-less

I'll be making sure it's spent. The kids are getting money now, once they've full time jobs, they'll be paying their own way in life

[AustinPowers]

That 7 year thing is standard I think. Non farmers do that with houses so they don't have to pay for their nursing homes etc.

Fairly standard estate planning is to transfer assets to children as the IHT tapers down and disappears if you survive 7 years. It has to be a gift without reservation though, i.e. you cant transfer your house to your kids and then live in it rent free as the HMRC will look through that.

Trusts are a way of reducing IHT as well that give a bit more flexibility and could be useful for some farmers after the Budget. However, they are more complex to set up and will need legal structuring.

One thing that has not been mentioned too much is  bringing pensions "in scope" for inheritance tax. Currently, private pensions are excluded from inheritance tax. Now pension pots  will now be included in IHT calculations from 2027 so the pension pot will get added to property and shares as part of potentially chargeable assets using up the allowance.

Most of these measures will affect "wealthier" people but it will hit farmers badly as you have to have the cash to pay the tax.

So, if you've paid off your  mortgage, you can't transfer your  house to a son/daughter, and continue  to live in the house?

[Armagh18]

Is this when the farmer dies?

Can he, when alive, not just write a will? Or does this involve a tax, regardless of who and when the will is made?

Don't think a will changes anything.

Someone had said it can be gifted 7 years before the original owner dies without a tax burden but not sure if thats true.

yeah the 7 year thing is true or at least it was unless its changed recently

[Armagh18]

That 7 year thing is standard I think. Non farmers do that with houses so they don't have to pay for their nursing homes etc.

Fairly standard estate planning is to transfer assets to children as the IHT tapers down and disappears if you survive 7 years. It has to be a gift without reservation though, i.e. you cant transfer your house to your kids and then live in it rent free as the HMRC will look through that.

Trusts are a way of reducing IHT as well that give a bit more flexibility and could be useful for some farmers after the Budget. However, they are more complex to set up and will need legal structuring.

One thing that has not been mentioned too much is  bringing pensions "in scope" for inheritance tax. Currently, private pensions are excluded from inheritance tax. Now pension pots  will now be included in IHT calculations from 2027 so the pension pot will get added to property and shares as part of potentially chargeable assets using up the allowance.

Most of these measures will affect "wealthier" people but it will hit farmers badly as you have to have the cash to pay the tax.

So, if you've paid off your  mortgage, you can't transfer your  house to a son/daughter, and continue  to live in the house?

Never knew that. Maybe the law but in practice the gifting to a child and living in it happens and it works.

[Milltown Row2]

Just sell it.. spend the money on those year long cruises until the money runs out

Come back with no money and get free accommodation in one of those assisted living places!

[RedHand88]

That 7 year thing is standard I think. Non farmers do that with houses so they don't have to pay for their nursing homes etc.

Fairly standard estate planning is to transfer assets to children as the IHT tapers down and disappears if you survive 7 years. It has to be a gift without reservation though, i.e. you cant transfer your house to your kids and then live in it rent free as the HMRC will look through that.

Trusts are a way of reducing IHT as well that give a bit more flexibility and could be useful for some farmers after the Budget. However, they are more complex to set up and will need legal structuring.

One thing that has not been mentioned too much is  bringing pensions "in scope" for inheritance tax. Currently, private pensions are excluded from inheritance tax. Now pension pots  will now be included in IHT calculations from 2027 so the pension pot will get added to property and shares as part of potentially chargeable assets using up the allowance.

Most of these measures will affect "wealthier" people but it will hit farmers badly as you have to have the cash to pay the tax.

So, if you've paid off your  mortgage, you can't transfer your  house to a son/daughter, and continue  to live in the house?

You can, I'm not sure if the specifics or how it's done but you definitely can.

[Milltown Row2]

It's the same thing, 7 years I thik is still there..

Did our will the other day, we split the house up when doing a need deed, I owe 50% the wife owes 50% .. the government can't take half a house apparently, so if one person went into care it wouldn't come from payments off the house.

Kids are the trustees also, though a friend mentioned that it might make it harder for them to get a mortgage? Need to check that out.

[OakLeaf]

It's the same thing, 7 years I thik is still there..

Did our will the other day, we split the house up when doing a need deed, I owe 50% the wife owes 50% .. the government can't take half a house apparently, so if one person went into care it wouldn't come from payments off the house.

Kids are the trustees also, though a friend mentioned that it might make it harder for them to get a mortgage? Need to check that out.

We've had this scenario twice in the last 10 years. 6 years ago my wife's mother was diagnosed with alzheimer's at age 64. She and her siblings had to sell her house and put her in the care home. The solicitors at the time told them about the 7 year thing. Basically all those funds were drained paying for the care home. She's still there but the state is now paying.

However, 4 years ago my mother was showing signs of dementia. She was 90 at the time. My sister and I consulted our solicitor and he checked things out with the revenue. As it turns out they only go back two years for the care home scenario, as opposed to inheritance after passing. We were able to transfer my mother's assets (house and farm) to my sister. She went into the care home, which only drained her savings. She's since passed and her will was still honoured even though the assets were in my sisters name.

Definitely worth checking out with your sollictor.

[johnnycool]

God help the farmers when their main spokes person openly admitted he bought his farm to avoid paying Inheritance Tax;

Clarksons tax avoidance farm

And then you've chief Brexiteer Bad-Enoch telling them she's got their backs!!

[Armagh18]

Fair fucks to them. A few load of slurry sprayed on Keir and the rest would be perfect