Countryside Alliance briefs MPs on impact of planned changes to Agricultural Property Relief

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.

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 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.

At the time of writing, twenty five local authorities have already passed motions condemning the budget changes and their impact on family farms

Baroness Mallalieu, a Labour peer who serves as President of the Countryside Alliance, wrote:

“Closing a loophole to stop people avoiding tax is a legitimate aim and Rachel Reeves is perfectly justified in addressing that.

What she has not done, however, is to do what she also promised and protect family farms whilst doing that.

The threshold she has set for inheritance tax is completely unrealistic and my farming neighbours and others all across the country are now terrified that dying at the wrong time will see farms that have been in the same families for generations broken up to meet the demands of the tax man.”

The Countryside Alliance calls on the Chancellor to revisit this policy. She should revise it so it can fulfill the objective of preventing the abuse of landholding as a means of avoiding inheritance tax without risking the inter-generational viability of legitimate family farms.

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