Budget announcements by the Chancellor of the Exchequer, Rachel Reeves MP, restricting the availability and thresholds for Agricultural Property Relief and Business Property Relief have produced a furious reaction among farmers.
The Chancellor’s stated policy objective was to prevent the use of land acquired by the wealthiest estates as a means of avoiding inheritance tax, but subsequent debate has focused on the number of estates that will be affected annually.
The Countryside Alliance is greatly concerned that the changes will mean family farms being captured by inheritance tax, meeting those bills will necessitate sales of parts of landholdings, food security will be threatened as a result, and there will be particular impacts on the estates of farmers who die within seven years of any tax planning measures they take to mitigate the effects.
Closing a loophole to stop people avoiding tax is a legitimate aim, but the Chancellor has failed to meet her pledge to protect family farms in doing so.
On Monday 10 February, there will be a Westminster Hall debate in response to an online petition which relates to inheritance tax relief for working farms. Ahead of this debate, the Countryside Alliance has issued an updated briefing note to MPs outlining our position on the issue, as well as providing a breakdown of some of the disputed Treasury calculations in regards to the impact of this decision.
Analysis from the NFU, the CLA and the Central Association for Agricultural Valuers has called in to question the claim by HM Treasury that the changes will only affect 500 farms per year. Even supposing that claim was correct, over a 30-year generational cycle it would mean 15,000 farms being affected.
The House of Commons Environment, Food and Rural Affairs Committee held an oral evidence session on 11 December to seek to resolve the discrepancies between Treasury and sectoral forecasts as to the impact of the change.
The majority of the UK’s major supermarkets including Morrisons, Waitrose, Marks & Spencer, Sainsbury’s, Asda, Aldi, Lidl, Iceland and Tesco have publicly condemned the measure, identifying it as a threat to UK food security.
At the time of writing, 31 local authorities have already passed motions condemning the budget changes and their impact on family farms.