The chancellor’s small concession on her “flawed” farm inheritance tax plan is “nowhere near enough” to stop its devastating impact on farming families, warned industry leaders.
At last year’s Budget, Rachel Reeves provoked fury in the farming community by announcing plans to scrap inheritance tax relief for farms valued over £1m – leaving many farming families suddenly vulnerable to a 20pc tax when handing land and assets to the next generation.
The so-called Family Farm Tax has sparked countless campaigns – including the EDP’s Fair Deal for Farmers campaign – and protests including this year’s Budget day demonstration which led to several arrests after farmers drove tractors in Whitehall, defying a last-minute ban on agricultural machinery by the Metropolitan Police.
The chancellor has resisted industry pressure for a U-turn on the controversial policy – but she did announce that the £1m threshold will now be transferable between spouses.
The change means that if a married farmer dies, they can leave £1m of agricultural assets to their spouse, who will be able to adds this to their own £1m allowance when handing assets down to their children on their death.
Tom Bradshaw, president of the National Farmers’ Union (Image: NFU)
National Farmers’ Union (NFU) president Tom Bradshaw said: “It’s good to see the government accepts its original proposals were flawed. But this change goes nowhere near far enough to remove the devastating impact of the policy on farming communities.”
“It’s only right that agricultural allowances can be transferred between spouses and it’s something we’ve been calling for, but it doesn’t go anywhere near far enough in protecting the working people of the countryside. It does nothing to alleviate the burden it puts on the elderly and vulnerable.”
Andrew Blenkiron, managing director at Elveden Farms, on the Norfolk-Suffolk border near Thetford, and a former NFU Suffolk chairman, said: “It is hugely disappointing that the government did not take the opportunity in this Budget to make significant changes to this cruel and damaging family farm tax policy.
Andrew Blenkiron is managing director of Elveden Farms, on the Norfolk/ Suffolk border, near Thetford (Image: NFU)
“The small change announced does not protect the majority of small and medium-sized family farms across East Anglia, many of which have fed the nation for generations and now face an uncertain future.
“The inheritance tax proposals continue to stifle investment, have a devastating impact on the entire rural economy and do little to tackle the issue of people just buying land to avoid paying tax.
“The government continues to leave elderly farmers in a hugely irresponsible position and is putting our national food security under threat.”
Norfolk farmer Gavin Lane is the national president of the Country Land and Business (Image: CLA)
Norfolk farmer Gavin Lane, who is president of the Country Land and Business Association (CLA) said: “This concession is the first public signal that the chancellor knows her inheritance tax reforms have been a disaster.
“Across the country, family businesses have been reducing their investment, at an enormous cost to the economy and the British public. It is not too late for her to scrap the entire policy, and finally recognise the enormous value family owned businesses bring to the UK.”
