Land commission

I believe when the Land commission divided a farm among neighbouring farmers, they gave the new tenant farmer a loan to pay for it, which was then paid back twice yearly

Not sure. Uncertain which land act the place here was bought under( presume prior to WW 1) but the little final demand slips ( from memory similar to a bank lodgement slip) came here till the mid 90's. Think it was about 10 pounds each moiety ( twice a year)

Did all the small ones not get wound up around that time as the money was so little ?Ours did anyways.

what and who will say what is a “serious” farmer??

And if the children of a “local businessman” want to be farmers what’s wrong with farms been bought for them.? Whoever is missing out on buying land because they can’t afford it should have maybe tried being a “businessman”instead of being groomed as heir apparent by loving parents

Ones that produce food. Would you like to become a modern day serf to a wealthy landlord? The vast majority of people are not going to do that. That model was tried and gotten rid of over 100 years ago. You'll work your own land and try to improve it and maybe try to extend and build up over time but most are not going to do that on 100% rented land. You may be different and you might be happy to doff the cap. Ironically, that system eventually crashed due to many large estates becoming uneconomical. The original land commissions were to allow the tenants working the land to own it so that there would be an incentive for them to modernise and improve it. Why would anyone want to go back to that kind of a model?

If you relegate the value of land to simply being an instrument used to store and transfer wealth, then don't be surprised if that is all it eventually becomes used for. It merely becomes an artificial token to avoid taxes for wealthy people.

You're argument of someone "becoming a businessman" actually illustrates the issue. The nonsense about "being groomed as hair apparent" just comes across as bitter. Someone who is left land is not going to be buying that land. The value of land that anyone inherits is meaningless unless you are going to sell it! And someone who is a businessman is not going to be farming it (except on a part-time or hobby basis). Your suggestion for a model amounts to "if you want to farm, you need to go and do something else instead of farming".

If we had a society where half of all nurses were over 60 years old, nobody would suggest creating a system where an 18 year old who wants to become a nurse needs to go to work in a high paying tech job so that they can afford a permit allowing them to be a nurse at the weekends. The State could created a strictly limited number of those permits, then allow anyone to buy and sell them, with the incentive that they would be exempt from inheritance tax.

Your concern for the children of local businessmen who want to become farmers could be easily alleviated. Currently, under Ag relief, the person inheriting the farm must be a qualified farmer and farm it for 6 years, or rent it to a qualified farmer. So you could keep the former and do away with the latter.

My preferred solution would be, that instead of doing the 90% reduction in value, you could choose between (1) option whereby that the State keeps a share of say 40% in the land or (2) regular 33% CAT up front. For option (1) the State's share would decrease by 1% per year and is written off at death if any remains. You can argue for 2% per year etc. That's the basic idea.

MAGA - Make Agriculture Great Again

My suggestion solves the problem which (I presume) Ag Relief is intended to solve - that being a situation where a beneficiary is forced to sell (part of) a family farm in order to pay death duties - while also making land less attractive to be used as a simple inheritance tax avoidance scheme.

I will likely buy land at some point in the future. And I won't mind paying more than it is intrinsically worth. The reason being because of the other advantages that buying it brings aside from the value of what it produces. When I buy it, a farmer with no additional income, or windfall to dip into, will not be able to outbid me based on what he will earn from it if I really want it. Which is mental and distorts the market but you have to play within the system as it exists.

If you are the young neighbouring farmer to that future block of land, trying to make improvements to build up your own place to protect its future, well it's not my priority that that land might be worth to me in the short term for tax reasons what it would take you 10 or 20 years to return from it by working it.

I did a lot of driving today and saw thousands of acres not being farmed, a lot more than ACRES and organics can be blamed for.

If that's the way farming is going then maybe we're better off not subsidising it as the land will go wild on it's own. no need for farmers.

We came a across a solar farm today, it looked about50 acres of worked out sand pit, it'll be some mess in a few years when the briars and blackthorns get going

It fulfilled a need at the time, labourers got a bit along with a cottage, raised a family, the next generation availed of education. Small tenant farms that existed at the time added a bit to their lot as well. Come into the 21st century, you see the original tenant farms survive, selling sites only on the acquired land, never on the original home farm. None of the 'labourers' farms have survived around here, their families have gone on to better, some very successful.

hi again. I just like to clarify that I am not bitter about anything. The “heir apparent “ reference is to the fact that most farmers are farmers by the very good luck of inheritance . Generally they are identified afrom a young age and are aware of this all their lives. You have to admit that this is a great start in life, well above average so to speak. These IMO are the same chaps that think along the lines of rules being changed to stop anybody else eg business men from buying land because it is causing the price of land to rise thus leaving the heir apparent types not able to afford it because the actual business of farming can’t pay for the current market value of land. They then throw they’re toys out of the pram and want they’re fragile egos to be protected by legislation. Farming should be open to the ebb and flow of free markets including the land itself.
I don’t get the tangent about the nurses either

Get rid of agri relief, get rid of tax free leasing, do not allow agriculture land to be purchased within a company structure and watch the price of land fall.

However it will be the Bass's of this world that will benefit

No I didn't say land would be 5 or 6 times the price my view was simplistic food price would only be regulated by the farmer ability to purchase input as there would be huge wild swings in prices from year to year worldwide .......remember its capitalist society there's no intervention .......... it would be in short a complete shitshow .....that's before the wars etc.

I’m really not looking for aggro here but the nurse thing is purely hypothetical, the business man buying land is reality. If you start a new version of land distribution or making rules regarding farmers being more entitled to buy land because they are farmers you will totally distort everything. Economies and market are constantly evolving and changing over decades. This has always been the case. Intervening with legislation has rarely been a success

I'm not looking for aggro either. The nurse thing was an absurd response to what I considered the equally absurd suggestion that in order to become a farmer, someone should necessarily do something else to make money so that they can afford to be a farmer. I have no problem with the idea of going off and earning to set yourself up as regards having some capital, but the idea that you have to do it to buy land because you're never going to be able to come close to paying it back based off what you earn from it seems perverse to me. And I say that as someone who is looking to buy land on the back of money earned in an 9-5!

I never said anything about a new version of land distribution. That was earlier in the thread. I only addressed the distortion whereby wealthy individuals with no connection to agriculture can use land as a loophole to avoid inheritance tax when passing on wealth to the next generation. That is an existing intervention in legislation which already distorts things. Often these things are brought in with good intentions, but then they are taken advantage of and used for other reasons. I don't see the harm in cutting off loopholes once they become obvious. They should have been anticipated in the first place but that is besides the point. There is also a business relief which is equal to the Ag relief in terms of reduction but the requirements are slightly different. Ag relief is very easy once the beneficiary can pass the asset test. Business relief is easy too if you have a genuine business to pass on, but buying one simply to fulfil the conditions would not be.

100 acres goes up for sale for 3m. Apart from an intensive niche operation, could a regular farmer buy that and pay for it by working it? Not a hope. But a wealthy individual can use it to park their wealth for a few years to save their kids 1m in tax. So it is always going to be more valuable to them than it will be to you. That is a completely artificial construct which adds nothing to society. For the wealthy individual, the price per acre does not matter. What the land can produce does not matter. All that matters is that the value is preserved over time and that they get their tax relief at the end.

The biggest influence on land prices are inheritance relief, paying through a company structures and long term leasing tax relief.

Tax free leasing is encouraging older farmers and inheritors to retain land and take the leasing income tax free.

Inheritance relief is encouraging wealthy people to use it to transfer wealth to there children.

Buying through company structure allows untaxed income for land purchase ( subject to 12% tax)

The three of these that have driven up the price of land

No you are not a capitalist. You believe in price control of housing and land. The reason it is expensive is due to the tax benefits I posted to above.

The problem is we suffer from the law of unintended conquences. Yes traditionally we had rates which were abolished in the late 70's due to a constitutional case regarding rateable valuations.

In the mid 80 the FG/Lab government brought in a 2% tax on farm sales to replace rates and income-tax ( very few farmers were paying incomec tax) on farms but opposition from farm lobby groups got it repealed a couple of years later. In a way the opposition to it was shortsighted as it would have saved dairy farmers a fortune in accountancy and tax consultant fees and no need of a company structure.

You seem to have crossed wires in that you are going on about only people inheriting land being able to farm it, while apparently supporting policies that make it difficult for those that don't inherit it to buy it and farm it.

Son A inherits a farm. Son B doesn't inherit land but still wants to farm. I'd prefer to see a system where Son B could have a realistic chance at doing so off the back of what could be earned from it.

An no, I didn't say anything about "land purchase only being allowed" to any specific person or category. I say the artificial value given to land through administrative decisions could and should be reduced. Let the businessman lump down his 3m if he wants. But change the Ag relief to fulfill its intended purpose while eliminating tax avoidance loopholes. He can still buy it - he will just have to keep it and work it to avail of the reduction. He is more than welcome to do so.

There's any amount of so called part time farmer's subsidising what bit of farming they're involved in with money from off farm jobs & unrelated income.

Doing a disservice a long time now I believe to farming. Not much different to business men & wealthy folks buying land to transfer wealth. Yes they may not be thinking about wealth transfer, but doing full time guys no favour with this foreign money so to speak.

Grand job 😁

wires definitely not crossed. I would imagine a few of the other contributors can understand what I’m saying.

We’re back to my first post, who or what decides this system you’re on about for the likes of son B?

It sounds like a very flawed ultra complicated system.

Yes, and those interventions usually come with controls to restrict them to their intended purpose.

When there is funding made available for TAMS, and farmers can get a 40% grant to buy a slurry tanker, nobody would call for the scheme to be opened up so that a non-farmer could buy 10 tankers, get a 40% grant, and ship them abroad to sell them to make a fast buck.

To be clear, I have no problem with anyone inheriting anything nor do I begrudge anyone anything. What I do have a problem with is people whinging about non farmers buying land and causing an inflation of land prices. It is generally farmers that inherit land that have this gripe. Why? Because they simply want to by more land to make themselves wealthier, which in itself is not a bad thing, but they don’t want competition business men with money to spend . Let the market find its own level without any protectionism is all I’m saying. I’m sure the vendors that sell the farms to the “businessmen” have no problem with the way the market stands

It isn't a form of protectionism to close a loophole any more than it is "protectionism" not to allow the same businessmen to purchase those 10 slurry tankers, get the 40% grant and export them for sale elsewhere.

The model that I proposed is agnostic to the individual. Everyone gets the same conditions and the same outcome. If that is protectionism, then we have different definitions of the word!

I'd understand your position if you were taking the same line as Bass insofar that you wanted Ag Relief completely eliminated. But wanting a system that favours those that inherit land to sell it, while interfering in the market to increase the price at which they can sell, while at the same time griping about them, just doesn't make sense to me.

The reason that you see mostly "inheritors" trying to buy additional land is precisely because it would be virtually impossible to buy a sustainable farm and pay for it by working it under the current system. Go back to my example of the 100 acre farm for 3m. It's worth it for the businessman. It's not worth it to a person for whom it will be their only source of income to pay for it.

I think (although open to correction) that the valuation date is as of the date that probate is granted.

In an "emergency" situation, a beneficiary who knows what is in a will, who has too many non-ag assets, albeit ones which are liquid, could go out and "burn" some of those by buying land. It would decrease the non-Ag while also increasing the Ag assets.

Of course, yes, much better to be planned. I wasn't trying to contradict what you said, I was just adding to it to say that even in an "emergency" situation, I think it can still potentially be managed.

It wouldn't work if the non-ag asset was a 1m house, but if it was 1m in liquid stocks then I think it could be done.

If the person's assets consisted solely of 1m in stock on the valuation date then they would be stung for ~900k CAT on a 3m farm from a parent, but if they "burned" 200k by liquidating some of their stock and buying some other land first they could pay zero CAT through Ag Relief………..good luck to the farmer saving up his pennies for years to buy that 8 acre field across the ditch when the aforementioned beneficiary is sitting in that auction room anxious to get their ratios correct.

It's probably not that common …. but it is a good example to show how people could take advantage of the rules and the types of savings to be made

I also don't get the focus on people inheriting land. I'd say that most who inherit any have earned a good proportion of it via unpaid labour through the years. And that would be even more so if we didn't have artificial inflationary pressures on its value