Opinion: I can’t avoid ‘dreadful’ task of gifting farm to my kids

“Starmer The Farmer Harmer” read a discarded banner I nearly tripped over on Westminster Bridge in the aftermath of the NFU-led protest about inheritance tax (IHT).

A clever slogan, but I’ve been trying to work out how much of a problem this IHT charge actually will be to me, bearing in mind any amount of tax payable on my estate is never going to be a worry to me personally, as I won’t be here to pay it.  

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About the author

Stephen Carr

Farmers Weekly Opinion writer

Stephen Carr runs an 800ha beef, sheep and arable farm on the South Downs near Eastbourne in Sussex in partnership with his wife and four of his daughters. He also runs a nearby pub with his nephew, The Sussex Ox, which serves the farm’s beef, lamb, (and fruit and vegetables from the farmhouse kitchen-garden in season) through its restaurant.

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Like many farmers, I’m currently vulnerable to the new tax, albeit that at a top rate of 20% after allowances and payable over 10 years it’s not exactly extortionate.

But I own even more hectares than Jeremy Clarkson, mostly bought over a 40-year farming career, and hardly a square metre of them has yet been gifted to the next generation, even though all five of my daughters are partners in the business.

The reason that I still own nearly everything, apart from the fact that I’m an uncompromising autocrat who can’t bear the thought of giving control of the business to anyone while I still have a breath in my body, is that our solicitor has always been adamant that the smart thing to do was to die still owning it all.

But, thanks to Rachel Reeves’ Budget, that tax planning advice has been turned on its head.

Now the urgent emails from my solicitor (what sort of grotesque boom have rural lawyers and accountants experienced over the past few months?) say it’s time to give the farm to my children so that at least seven years can pass before my death and they can escape any IHT liability.

Apparently, I also need to take out life insurance as soon as possible in case I don’t make the seven years, and before I get so old that it makes the premium too expensive.  

He’s even suggesting that my children, one of whom is not even out of university for another three years, also make out their wills.

Otherwise, should the unthinkable happen and any of them predecease me, their estates might revert to me.

All good advice I’m sure, but the thought of the lawyers’ fees involved to put all this into effect are enough to finish me off well short of the seven years they’re urging me to live.

I remember the late, great Hampshire farmer, journalist and writer John Cherrington once penning a piece in which he delighted at the thought of his family and their professional advisers all gathered around his deathbed, trying to persuade him to sign various bits of paper to reduce the death duties that would arise on his farm.

He fantasised about dismissing them all with an airy wave of his hand, declaring that they should pay their taxes and work as hard for their living as he had.

I have likewise mulled over doing nothing, based on the argument that – provided I can live long enough – I’ll see out this political cycle and hope that a less left-wing government in five or 10 years’ time will restore the pre-Reeves, tax-free status of farmland.  

But, that is to take a huge risk so, with a heavy sigh, and unless Starmer quickly indicates a change of heart, I’ll soon have to start the dreadful process of gifting the farm to my children in my lifetime.