Bye bye Starmer

[Swervin_Mervin]

5.5% rise in value for agricultural land over the last 12 months which would equal £180k increase in value on £4m of land. That's a pretty decent return, especially given the aforementioned relief on various taxes. Get the farm contracted out so that it's still in use and you're basically printing money.

And TBF that's exactly what's happening in the resi markets as well. City centre apartments being hoovered up by Chinese, Saudi, Russians etc. Rent them out (or don't as many seem to sit empty), sit on them for years and coin in the returns whenever.

Foreign investment in UK residential real estate needs to be aligned with the Singapore approach. Currently 60% stamp duty and increased recently from 30%.

It would cause a drop in high end property with a corresponding trickle down effect so it may make sense to phase in gradually. That and actually enforcing AML rules.

Would seem like a sensible approach. Could rake a few quid in that way and let farmers and businesses hold on to their assets and keep it in UK hands.

[Simon]

5.5% rise in value for agricultural land over the last 12 months which would equal £180k increase in value on £4m of land. That's a pretty decent return, especially given the aforementioned relief on various taxes. Get the farm contracted out so that it's still in use and you're basically printing money.

And TBF that's exactly what's happening in the resi markets as well. City centre apartments being hoovered up by Chinese, Saudi, Russians etc. Rent them out (or don't as many seem to sit empty), sit on them for years and coin in the returns whenever.

Foreign investment in UK residential real estate needs to be aligned with the Singapore approach. Currently 60% stamp duty and increased recently from 30%.

It would cause a drop in high end property with a corresponding trickle down effect so it may make sense to phase in gradually. That and actually enforcing AML rules.

I'd go further. Just ban foreign ownership entirely. No reason why non-residents should be speculating in UK property. I know Zed would agree with me.

[duncs500]

Genuine question re all these profit numbers being quoted about how much Harry makes through the farm. I assume he has staff on the farm whose salary comes out before the profit is calculated? Does he draw a salary before calculating his profit figure? Are all his family also on the pay roll? I trust that what he's saying is that the profit is his salary, but it's not a common way to report profits for other businesses, so I don't know why it would be for farming.

I would not be surprised if most farmers have family on the businesses pay role.

[Carlos]

It depends how the business is structured but staff/labour costs would come out before profit is calculated.

ETA assuming Mr and Mrs Miggins are a partnership their salary/income is from profit but anyone else - kids/inlaws/contractors etc is an expense before profit.

[mik]

Genuine question re all these profit numbers being quoted about how much Harry makes through the farm.

https://find-and-update.company-informa ... ng-history

Harry & his missus are company directors.

2 employees listed on (not current) filings - I assume they are Harry & his missus

And yeah - you’d cite profits after salaries, but this can be misleading as - particularly in the past - directors would take small salaries to minimise PAYE taxes, and then take dividends from the company profits.

[Swervin_Mervin]

Genuine question re all these profit numbers being quoted about how much Harry makes through the farm.

https://find-and-update.company-informa ... ng-history

Harry & his missus are company directors.

2 employees listed on (not current) filings - I assume they are Harry & his missus

And yeah - you’d cite profits after salaries, but this can be misleading as - particularly in the past - directors would take small salaries to minimise PAYE taxes, and then take dividends from the company profits.

Gross profit after deductions of any goods purchased - could include sub-contracted works. Net profit is after costs such as salaries, pensions, equipment etc.

Some tax avoiding barstards still do minimise director salary and take dividends That margin is closing but still advantageous as it stands.

[duncs500]

Just seems like the profit figures being banded around could be a misrepresentation for effect. If you're making £30k profit after having taken out the cost of buying a new Range Rover, building a new barn (possibly to store cars in ), and paying the wife, kids and yourself a healthy salary, then that paints a quite different picture to saying I'm only getting £40k for my whole family to live on each year.

I'm sure the lines between a farming operation and the cost of the lifestyle around can also get a bit blurred. It really all depends on where that line has been drawn. Eg if you have £40k profit but are squeezeling the majority of your living expenses through the business, that profit is going a lot further in enhancing your lifestyle.

FWIW, I grew up in farming communities and most farming families seemed ok for money relative to most people. I'm sure it's got tougher to do well out of it since I was young though.

I'm fully supportive of farmers making a good living, it's hard work and they deserve it. I'd prefer the opportunity for highly wealthy individuals to take advantage of the loophole to be removed as no doubt it's done a lot of damage already and it's certainly not helping farmers make a profit. How we are address profits from farming is another issue and I don't think it has a simple answer.

[Jobbo]

Genuine question re all these profit numbers being quoted about how much Harry makes through the farm.

https://find-and-update.company-informa ... ng-history

Harry & his missus are company directors.

2 employees listed on (not current) filings - I assume they are Harry & his missus

And yeah - you’d cite profits after salaries, but this can be misleading as - particularly in the past - directors would take small salaries to minimise PAYE taxes, and then take dividends from the company profits.

His son works on the farm too. But I’m pretty sure he doesn’t have staff - it’s arable, you plant it, spray stuff on it a couple of times (contractor) then harvest. Other than Harry getting in a contractor with a different drill for the planting to see how the different drill performs, he and Charlie do the planting and harvesting themselves using machinery they own. I’m sure he mentioned labour costs in one of his financial round up videos.

[dan]

To be fair to Harry, even though he's clearly given up on being objective, he does usually mention in his videos that the profit on the farm doesn't include drawings, but he's clearly doing very well for himself so I don't feel bad.

My dad was a farmer for 50 years, unfortunately he never owned any of the farms he worked on so I grew up in a small 2 bed house not a giant farmhouse like I all the other farmers kids I knew. I also knew that I didn't want to be a farmer growing up as my old man was usually out of the house before 6 and often not home until it got dark, he ran a dairy farm for 30 years so milked the cows twice a day and did the silage in the summer.

Its back breaking work at times and other than the afternoon he cut three of his fingers off in a forage harvester and had to go to the cottage hospital to have them sewed back on, he genuinely never had a day off work, even when he sounded like death warmed up.

If anyone can come up with a good reason why farms shouldn't pay at least half of the tax that other businesses do i'd be all ears, but there obviously isn't one.

The issue of farms being unprofitable not helped by the last 14 years of policy is a totally separate one and deserves far more attention than inheritance tax does.

And yes, every last penny they spend will be a legitimate business expense taken out of the profit, from their new kitchens to their range rovers, quad bikes, all terrain vehicles, stables for the horses....the list goes on.

[IanF]

Genuine question re all these profit numbers being quoted about how much Harry makes through the farm.

https://find-and-update.company-informa ... ng-history

Harry & his missus are company directors.

2 employees listed on (not current) filings - I assume they are Harry & his missus

And yeah - you’d cite profits after salaries, but this can be misleading as - particularly in the past - directors would take small salaries to minimise PAYE taxes, and then take dividends from the company profits.

His son works on the farm too. But I’m pretty sure he doesn’t have staff - it’s arable, you plant it, spray stuff on it a couple of times (contractor) then harvest. Other than Harry getting in a contractor with a different drill for the planting to see how the different drill performs, he and Charlie do the planting and harvesting themselves using machinery they own. I’m sure he mentioned labour costs in one of his financial round up videos.

One way to keep costs down, I suppose..

[ZedLeg]

And TBF that's exactly what's happening in the resi markets as well. City centre apartments being hoovered up by Chinese, Saudi, Russians etc. Rent them out (or don't as many seem to sit empty), sit on them for years and coin in the returns whenever.

Foreign investment in UK residential real estate needs to be aligned with the Singapore approach. Currently 60% stamp duty and increased recently from 30%.

It would cause a drop in high end property with a corresponding trickle down effect so it may make sense to phase in gradually. That and actually enforcing AML rules.

I'd go further. Just ban foreign ownership entirely. No reason why non-residents should be speculating in UK property. I know Zed would agree with me.

Aye, that anyone is able to use property and land to speculate is a negative for society imo.

[Nefarious]

Aye, that anyone is able to use property and land to speculate is a negative for society imo.

Why? Unless you take a strict Rawlsian view (society as a whole can only be measured by the welfare of the least well off), foreign investment in UK property has bankrolled an awful lot of shit which has directly benefited UK society. We've had 15+ years of overseas investors inflating house prices, putting more money in the majority of people's pockets (home ownership is c.65% in the UK), which they then, in turn, spend on stuff that then benefits the economy as a whole. An awful lot of pensioners would be spending their retirement in relative poverty if it weren't for the rising value of their primary asset.

But more generally, a free and open property market keeps UK property prices "fair" in the international market. If you distort that market by preventing foreign investment, you artificially depress UK prices and incentivise UK investors to send their money overseas, with negative consequences for the UK economy.

[ZedLeg]

Making things that are essential to survival like food and shelter appreciating assets is stupid and short sighted.

[Nefarious]

In most cases food is a bit perishable to be an appreciating asset, and the commodity nature of basic foodstuffs means that their price will always largely reflect the cost of production.

"Shelter", although related to land/property prices, is a different thing. For example, rental yields (rental prices relative to property prices) have been dropping over the 15 year period that property prices have been rising.

And ultimately, it's not the sticker price on essentials that matters, it's affordability. And if something, like foreign property investment, is fueling affordability (majority of people get richer>buy more stuff>companies employ more people making stuff for them to buy), surely that has to be a *good* thing, no?

[Jobbo]

To be fair to Harry, even though he's clearly given up on being objective, he does usually mention in his videos that the profit on the farm doesn't include drawings, but he's clearly doing very well for himself so I don't feel bad.

My dad was a farmer for 50 years, unfortunately he never owned any of the farms he worked on so I grew up in a small 2 bed house not a giant farmhouse like I all the other farmers kids I knew. I also knew that I didn't want to be a farmer growing up as my old man was usually out of the house before 6 and often not home until it got dark, he ran a dairy farm for 30 years so milked the cows twice a day and did the silage in the summer.

Its back breaking work at times and other than the afternoon he cut three of his fingers off in a forage harvester and had to go to the cottage hospital to have them sewed back on, he genuinely never had a day off work, even when he sounded like death warmed up.

If anyone can come up with a good reason why farms shouldn't pay at least half of the tax that other businesses do i'd be all ears, but there obviously isn't one.

The issue of farms being unprofitable not helped by the last 14 years of policy is a totally separate one and deserves far more attention than inheritance tax does.

And yes, every last penny they spend will be a legitimate business expense taken out of the profit, from their new kitchens to their range rovers, quad bikes, all terrain vehicles, stables for the horses....the list goes on.

Really interesting and moving reading that Dan. My dad wasn't a farmer but I grew up wanting to be a farmer - until secondary school at least. That's probably because I thought tractors were cool as a child; I certainly didn't have the actual knowledge of how much work it was until much later on.

You're bang on of course. The purchase of farmland in vast areas by investors simply traps actual farmers like your father into farming someone else's land.

[ZedLeg]

The majority aren’t getting richer though, household incomes and standard of living are dropping for the poorest households.

I’m obviously looking at this as an anti capitalist but there’s no good reason for the average house price to have gone from £25k to £310k in my life time.

[Gavster]

In most cases food is a bit perishable to be an appreciating asset, and the commodity nature of basic foodstuffs means that their price will always largely reflect the cost of production.

"Shelter", although related to land/property prices, is a different thing. For example, rental yields (rental prices relative to property prices) have been dropping over the 15 year period that property prices have been rising.

And ultimately, it's not the sticker price on essentials that matters, it's affordability. And if something, like foreign property investment, is fueling affordability (majority of people get richer>buy more stuff>companies employ more people making stuff for them to buy), surely that has to be a *good* thing, no?

I can understand that yield is an investors perspective, however for most people that's irrelevant. As far as I was aware, the affordability of property in the UK has been consistently going down, e.g. property purchases have become less and less affordable for the average person over the last 50 years or so. I know that rents in London have been outstripping inflation recently too.

[Nefarious]

The majority aren’t getting richer though, household incomes and standard of living are dropping for the poorest households.

The UK has 65% home ownership. If houses get more valuable, 65% get richer. That's a majority. It's not counted as household income, because it's a capital appreciation, not an increase in income. But lots of people realise that capital appreciation as cold hard cash when they re-mortgage.

Dropping standards of living for the poorest is primarily being driven by other factors - fuel price inflation being fairly high up the list (poorer people spend a greater proportion of their incomes on heating and food - prices of which are driven by transport costs), and, at the lower income end, increasing commoditisation of the workforce (keeping wages relatively stagnant compared to general inflation).

We agree on a lot of things politically, but the foreign property investment thing, IMO is a case of ideology over pragmatism. You might object in principle to a small number of people raking it in for very little work, but if, on average, it's dragging everyone else up too, that surely has to be good.

Perhaps another way of looking at it - there is a wall of cash. It has to go somewhere. Rich people aren't simply going to keep it under their beds (and it would be pretty awful for the economy if they did). Whatever they invest in is going to become more expensive (supply and demand, innit). Would it be better if they drove up prices of something that *most* people own, or if they invested in things that only a few wealthy people own?

[ZedLeg]

Invest in companies, collect art, cars whatever. I don’t care.

We’re in a bad situation regarding housing in this country and the primary cause was selling council housing and the proceeding inflation of prices.

I’m not saying people can’t make money, I just don’t think it’s sensible or ethical to play the game with housing.

[ZedLeg]

Most people aren’t really making money off their house because they need the extra equity for the next move, or they pass it down.

All we’re doing is making it ever harder for young and poor people to get on the ladder.