When quizzed by the Liaison Committee – a supergroup of chairs of different parliamentary committees – prime minister Keir Starmer said the purpose of agricultural property relief and business property relief was to raise revenue in the budget and was not aimed at a particular group of individuals.
He also claimed that the vast majority of farms would not be affected by the changes.
Original purpose
However, Liberal Democrat MP and chair of the Efra Committee Alistair Carmichael said the PM’s words ran contrary to the original purpose of the reliefs, which was to ensure the succession of family farm from generation to generation.
Starmer said the government recognised the need to protect family farms and argued that the special measures (10-year, interest-free pay off period, reduction in IHT rate) ensured a ‘fair balance’ between raising the revenue and the protection they wanted to put in place.
NFU President Tom Bradshaw said: “Despite ministers previously claiming this was about punishing wealthy people avoiding tax, it’s clear from the Prime Minister’s words today that it is simply an indiscriminate revenue-raising measure with no thought given to who it impacts.
‘Clearly forgotten’
“What’s worse is that the government has clearly forgotten the reason agricultural inheritance tax reliefs were brought in in the first place – which was to ensure that farms would not be sold or broken up following the death of the owner and could continue to produce high quality British food through each generation.
“It’s clear that this government has entirely broken with that premise, and it will be farming, then its associated industries, and then consumers who will bear the impact.”
Meanwhile, following recent backlash from many UK farmers against changes to inheritance tax, Sam Cawley, investment director and chartered financial planner from law firm Nelsons, explores what this will mean and some key considerations to help prepare for change and mitigate impact.
