ALASDAIR Macnab, who farms south of Dingwall, was one of the farmers who took part in the protest in London last week against the new inheritance tax policy.
He told the Sunday National it would have a “devastating” impact on farming in Scotland, with land farmed by the same family for many generations sold off to pay the tax.
“The Government seems to think this will result in lower land values but we don’t think so, because corporations will start buying land for solar panels and other enterprises,” he said.
Macnab (below), who is vice-president of NFU Scotland, said it could also increase the number of suicides in farming.
“We have just gone through a period of two years with virtually no profit,” he said. “A lot of people have made losses during the last couple of years, yet they are expected to pay an inheritance tax bill on top of that.”
He said that few farmers would be eligible for exemption from the tax as the £1 million threshold was too low.
“It sounds a lot of money but £1m doesn’t buy an awful lot of land,” he pointed out. “The perceived wealth is just on paper. It only becomes wealth when you cash it in.”
Macnab added that it was little comfort that the tax can be avoided if farms are passed on to the next generation at least seven years before the owners’ death.
“Many farmers have no pensions so they have an income problem as they can’t benefit in any way if they pass it on,” he said.
“We have heard really sad stories from farmers on the phone saying they can’t afford inheritance tax and don’t have a pension or insurance because they can’t afford them either.”
Macnab pointed out that there were seldom any quick ways to make money in farming.
“Farms are generally run in families for a number of reasons – one is that you grow up in it and secondly it is a very long-term business,” he said.
“For example, I have a pen of young bulls that I am selling for breeding next spring. I planned the pregnancies through the summer of 2022 and they were born in October/November last year but I won’t get any return on the money until the spring of 2025.
“That’s three years of planning, investment and waiting on that return. It’s the same in sheep flocks and suckler herds.
“Farming is a long-term investment industry and we are sitting here with rock-bottom commodity prices for everything.”
Farmers have also been hit by the UK Government’s decision to stop ringfencing money for agriculture.
Decisions on how Scotland supports agriculture now rest exclusively with the Scottish Government and NFU Scotland is organising a rally, on Thursday outside the Parliament ahead of the Budget on December 4.
NFU Scotland president Martin Kennedy said: “The huge level of uncertainty felt by farmers and crofters threatens food production, family farming and crofting businesses and the environment.
“NFU Scotland is resolute in our criticism of the taxation changes proposed in the recent Budget, with no industry consultation, and the implications these have for Scottish farmers and crofters and the next generation of those who will produce our food and look after our countryside.
“Another consequence of the recent UK Budget was the decision to end five decades of ring-fenced, multi-annual funding and for that funding to now become part of the Scottish Block Grant “The Scottish Government now has an opportunity to demonstrate that they do understand and will fully support a thriving Scottish agriculture sector.”
