Taxing death

Since the new Labour government’s Halloween horror show budget last month, the farming sector has been in turmoil. Up to now, farms have mostly escaped inheritance tax on land and equipment, with a mixture of Agricultural Property Relief (ARP) and Business Property Relief (BPR). Suddenly, they are faced with a 20% tax on death after the first million pounds. They’re being told to give their property to their children, make sure they don’t die within seven years (or they will still have to pay inheritance tax), and find some way to fund their remaining years because if they carry on running the farm as before then HMRC won’t accept it has been given away at all. Or set up some complicated and irreversible trust or company structure to avoid it, with consequential and ongoing fees to accountants and solicitors to make sure they don’t fall foul of the ever changing tax rules, and hope the government doesn’t kick the stool away from that too next year.
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