My father, along with others of his generation, speak of the impacts of Death Duties on farming families in this country, so we watch with sadness at the political changes taking place in the UK currently.

New Zealand had various forms of estate, inheritance, gift and succession taxes from the late 1880s, prior to the inception of progressive income taxes.

They tended to be championed by Labour and wound back by our national governments.

Death Duties peaked here in 1960, at 60% of the value of the estate.

See also: Farmers and wider industry unite to challenge IHT plans

About the author

David Clark

Farmer Focus writer

David Clark runs a 463ha fully irrigated mixed farm with his wife Jayne at Valetta, on the Canterbury Plains of New Zealand’s south island. He grows 400ha of cereals, pulses, forage and vegetable seed crops, runs 1,000 Romney breeding ewes and finishes 8,000 lambs annually.

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Many farming families found this crippling and selling the farm was often the result, particularly if the death occurred when the farmer was relatively young, with school-age children, or if the next generation of farmer had only recently joined the family business with parents passing on soon after.

Two remedies were used by families to try and ensure ongoing family succession.

Life insurance policies were purchased to cover the amount due at the time of death, and trusts were employed with continued “gifting” to move the asset onto the next generation.

By the time the national government abolished these taxes in 1993, it was acknowledged that in reality the tax raised very little revenue.

It generally impacted those with modest asset levels who could not manipulate their affairs to avoid tax, whereas the wealthy were able to structure their assets well outside the reach of the taxman.

Growing food requires land, but with poor returns, so it is difficult for a young farmer to start out.

The “family farm” passed down generations therefore has particular importance.

I would question the motives behind the changes to your inheritance tax.

Does your government value the private, family ownership of land used for food production by working farmers?

The alternative is the corporate ownership of land, whereby the “corporation” continues to exist well beyond the working lifespans of the people within the business, and therefore is untouched by inheritance tax.

These taxes were a failed policy in New Zealand and, rightfully so, have been long abandoned.