Stuart

#FamilyFarmTax talking points - a helpful guide: 1. "It's only 500 farms". No, that's APR claims above £1m made in one year, 2021/22. Many more people than that are affected by the rules. The CLA estimated the total number is 70,000 farms. On the Government's own numbers it's about 16,000 (500 x one generation of 32 years). The true figure is that it's likely tens of thousands are affected. 2. "There's a £3m exemption". No, that only applies if both spouses are alive, they can split the farm between them, they amend their wills before dying, both they are their children are in stable marriages (or they are prepared to use complex trust structures). It will not be possible for all couples to achieve this. 3. "Family farms are protected". No, DEFRA says the average family farm is 217 acres. At £11,300/acre that's £2.45m. Together with equipment and a farmhouse, that's likely well over £3m which is the maximum level of the exemption. Farms well below that level are affected and will need to take steps to restructure the way they are organised or face inheritance tax bills when the older generation dies. 4. "How can your income be that low? The price of land must be high because of tax avoiders." The current 100% exemption for land and businesses have applied since 1992. The price of land didn't start to rise significantly until 2005, when the Single Farm Payment was introduced. Tax rules only have a minor affect on land value, which is driven by multiple factors including development, rollover relief, environmental needs, and that they're not making more of it 5. "This only affects the very wealthy and tax avoiders" At one end lifestyle buyers may well be within the £1m exemption per person, at the other the very wealthy can still plan by making gifts. The people who cannot avoid it are family farmers who need to retain access to the farm income. 6. "Wealthy farmers can just pay their fair share of tax" An average farm income is about 1%. Even if you pay over 10 years, the inheritance tax payments will often take all the income, and so part of the farm will need to be sold. This reduces efficiency and makes the farm less viable for the future. What have I missed?

@ddhitchens This isn't, in my view, because he's morally grounded. It's because he's utterly hidebound by process in the worst possible way we've seen under the current Government.

Credit to James Murray—when asked last month, he declined to attack the Lords’ scrutiny of the bill: “This is a sensitive topic, it’s a complex topic… These are the rules of how the House of Commons and the House of Lords work. You set the rules, then you operate within them.”

Important comment from the wise @DavidDavisMP . Critically, should the court prove intractable "the next step will be withdrawal and action to find a better mechanism." Human rights do not begin and end with the EHRC. Sometimes the idea is great but the process doesn't work.

A company called Liberty Rock claims you can pay your tax with a magic cheque. They'll make all your tax go away, for the small, small fee of 30% of the amount. The only problem: it's a fraud. We’ve obtained the documents and are naming the names. Thread:

Looks like Rosie Wrighting met the new Health Minister, and promptly resigned.

@Adeniyi1111111 So who breaks the cycle of viciousness?

@StuartMaggs I agree generally, especially on your point on forgiving mistakes. However, Rayner and Starmer demanded resignations daily when in opposition, for smaller transgressions. "Law makers can not be rule breakers". Remember that one? Its the hypocrisy that stinks.

I was probably wrong in my conclusion on the point of whether AR's conduct amounted to carelessness. It's worth sharing why. 1. I made some assumptions of the casual nature of the transactions. Firstly a sale of the balance of AR's home to a trust where she was not a beneficiary. Then a different firm instructed on a different purchase in Brighton, with a cash deposit and mortgage. Separate transactions split in time, different lawyers. 2. I presumed the comments about "we recommend you seek specialist advice" were as I see regularly - buried in terms and conditions, or just boiler-plate clauses to cover people's conclusions. 3. I'm an optimist. Over the years I've seen some surprisingly positive decisions for clients (with full declaration of the facts), reflecting that the human beings at HMRC can be generous. In those circumstances my experience is that HMRC can give positive decisions. I stand by this. The analysis released by others more expert in SDLT enquiries and claims than I am has suggested they are very surprised by the outcome. AR's barrister has indicated they had advice that the tax might not be due, and that is a good ground for lack of carelessness (i.e you reasonably thought that was the right tax). But that's a different reason to those above. I could have ignored the embarrassment of being wrong on this point and moved on, but I felt it was worth sharing that professional opinions can differ, especially if you don't have all the facts (which we still don't). I am happy to defer to those more expert in SDLT enquiries than I am. There is some negative discussion about "opinion shopping" - going to different lawyers until you get the interpretation you want. This is generally a bad thing. But it is worth getting a second opinion on important points because professionals are human and sometimes they can be wrong. The good ones will tell you when that happens, and correct themselves. I try to be a good one. One thing I do stand by is that politicians on all sides make mistakes too. Unless we as a nation can be more forgiving to our political opponents, and them to us, we condemn ourselves to ever-changing masters in office for mere months with limited experience of their briefs, their careers hanging by a thread on the risk of some past mistake hitting the front pages. I fundamentally disagree with most of Angela Rayner's politics. But I believe in democracy and I think the country would be a better place if people in her position weren't pressured to resign for the sort of mistake she made. If we want a better nation, and better politicians making decisions on our behalf, we have to cut them more slack to make mistakes in their lives. Mistakes on policy, decisions like the IHT changes, Winter Fuel payments, Jury Trials, Chagos Islands, those are good reasons to criticise politicians. Getting your SDLT wrong but fixing it as soon as you found out for, that sort of thing I think we should let slide with a knowing nod that there but for the grace of god go I.

That's pretty cynical, and not what I was saying at all. Jurors should absolutely that faithfully try the defendant and give a true verdict according to the evidence. However it's vital in my view that the verdict is given by jurors in significant cases, not imposed by judges. As to frequency, following R v Wang judges cannot direct a conviction and criminal litigators would be better sighted than I to comment.

@StuartMaggs IOW it's OK to ignore the juror's oath and acquit if, say, the accused supports my team, seems nice, shares my belief in... And I'd like to know the evidence that it's "Rarely used"

It is difficult to overstate how important a principle of British justice this is. Juries are able to acquit people because they feel the person should be held not guilty, regardless of the law. Rarely used, but the sort of thing that gives you reassurance that underlying legal complexities there is a strong strand of morality. This is another reason why the plan to limit jury trials is so outrageous, and should be junked.

Seriously? At least he's not in the Treasury any more. How much damage can he do to the NHS...er?

@DanNeidle @BarbaraRich_law I was particularly proud of being asked if I was a Labour candidate today. We had a good chuckle at that!

@BarbaraRich_law Thank you, Barbara. Mostly it’s funny. If it helps you and others identify the nutters, they’re doing us all a favour.

An update on Angela Rayner. I wrote this morning that our team didn't understand why HMRC accepted Ms Rayner was not "careless", and so escaped penalties. I've since spoken to her lawyer, Graham Aaronson KC. The conversation was surprising.

@Nervous_72 @UKLabour @jamesmurray_ldn I think it is very different. I strongly opposed the retrospective loan charge and its introduction to accommodate poor action from the Revenue. My view here is very different.

@StuartMaggs If anything it highlights one rule for MPs and another for the rest of us. @UKLabour @jamesmurray_ldn betrayed #LoanCharge victims.

This decision by HMRC does not surprise me. Angela Rayner got caught in an obscure part of the legislation and the fact that no penalty was levied indicates that HMRC agrees. It shows that people can correct their tax affairs without upset when they have done no wrong. Sometimes tax is complicated.

She did not take the tax advice she was recommended to. There is a cost to that. Most people in my experience do not pay for that extra advice. She has done nothing unusual. She did not live up to the exceptional standards expected of a cabinet minister, but she did act as most of the population do. Does that answer your question?

@StuartMaggs Stuart you are an expert. I respect your opinion. "Sometimes tax is complicated". In a similar position I consulted with the trust solicitor/accountants who discussed an issue and formulated the correct resolution. Has Rayner really done nothing wrong ?

The problem with the Office of Tax Simplification is that is was prevented from suggesting sensible changes that would have dramatically improved the tax code, if to do so would change the tax take even a little bit. The Treasury should undertake a cost benefit analysis of the entire tax legislation with the aim of reducing it by 75%. It is wrong that people and businesses are subject to laws that only a handful of nerdy experts (like me) can understand. I’d be surprised if 5 of the people voting on each Finance Bill actually understood it.

No. Sometimes you can struggle to get timely responses or indications from HMRC, but in extreme situations (e.g. the taxpayer is about to go bankrupt, they want to be Prime Minister, etc) you can often hurry things along. You do worry whether that might incline them towards a negative response though, so you have to be careful. It’s a matter of judgement.

@StuartMaggs Does the timing of the clearance surprise you ?

The only thing I’d take exception with is that Angela wasn’t advised by experts. In fact, the people who told her to pay standard rate specifically said they weren’t experts, and that she should take expert advice.

@DanNeidle I’ve gone back and checked the report. It’s not clear, but I read it as a couple of standard “We think tax is this but are not SDLT advisors and recommend you take specialist advice” statements.

@StuartMaggs It’s not entirely clear, but I took the Sir Laurie letter to mean this wasn’t the usual arse-covering “get tax advice” statements, but something specifically related to the trust?

@THE_LHC @KWargamer @DanNeidle It’s vanishingly unlikely no interest was charged.

@KWargamer @DanNeidle @StuartMaggs Do you know that no interest was charged?

James Murray on Radio 4 suggesting that the local election results mean the country is telling Labour to do what they’re doing, but faster, is the height of self-deception! 20-something U-turns in 22 months says different. The Treasury Ministers’ decisions have been awful - NIC, CGT hikes, changes to IHT, VAT in school fees. Politically inspired decisions that have reduced total tax take, not raised it. Our country needs this to be better.

That’s been my consistent experience, yes. While standard letters to clients may recommend taking specialist advice, almost nobody does on a normal residential purchase. She was caught out by a trust where she wasn’t even a beneficiary, I understand. I don’t think HMRC would regard missing that point amounts to carelessness, and the result suggests that’s right. The interest will have been painful though I don’t doubt.

@StuartMaggs Even though she was advised by two sets of lawyers to obtain tax advice, and didn’t?

@ukhpinfo You write or call setting out the reasons (e.g. emotional trauma, financial difficulties, I want to run to be PM, etc). You ask very nicely. A human being reads that and acts accordingly. It doesn’t always work but being polite improves your chances significantly.

@StuartMaggs Hi @StuartMaggs - what would be the process in requesting an expedited conclusion?

I’ve been dealing with the Revenue for nearly 30 years. Neither the timing nor the outcome of their decision on Angela Rayner’s SDLT surprises me, and I’d expect to get a similar result for anyone in similar circumstances, i.e. pressing events managing to achieve a timely conclusion. This is normal.