Many farmers worried for the future after ‘completely unfair’ tax changes – NFU
The “completely unfair” change to inheritance tax for farms has left farmers across the UK worried for their future, the head of the National Farmers’ Union has said.
NFU president Tom Bradshaw said he had never seen “the weight of support, the strength of feeling and anger” over the plans to impose inheritance tax on farms worth more than £1 million, and added that many farmers wanted to be “militant” over the issue.
Under plans announced in the Budget, inheritance tax will be charged at 20% on farms worth more than £1 million, although the Chancellor has said that in some cases the threshold could in practice be about £3 million.
The move has caused a considerable backlash from farming and countryside communities, and led to a dispute over just how many farms and farm businesses would be affected.
Dispute
Speaking after a meeting with Environment Secretary Steve Reed and Exchequer Secretary to the Treasury James Murray, Mr Bradshaw challenged the figures from the Treasury, that only a minority of farms would be affected.
He told the PA news agency: “Obviously, we fully dispute the figures the Treasury has been using and we’ve played back Defra’s own figures.
“So, the Treasury is saying only 27% of farms will be within scope of these changes, Defra’s own figures suggest that two-thirds of farms will be in scope.
“How they can have that wide a discrepancy within Government is quite unbelievable.”
He said there had been no resolution on the issue, adding: “We’ve made very passionately our perception clear, that this tax change is completely unfair.
“It had been ruled out by the secretary of state in the run-up to the election and now there are many family farms right across the United Kingdom that are worried for their future.”
He said he had been receiving calls from people in their middle age who have been running successful businesses, but whose parents were still in the family house and partners in the business, and might not live for seven years – the minimum time after a transfer of assets for inheritance tax not to apply.
Mr Bradshaw said: “There’s no way through it for them.”
And he said: “We will continue to try and work with the Government to get to a resolution but something has to change.
“I have never seen the weight of support, the strength of feeling and anger that there is in this industry today.
“Many of them want to be militant.
“Now we are not encouraging that in any way shape or form, but Government need to understand that there is a real strength of feeling behind what this change means for the future of family farming in this country.”
“Small number”
Chancellor Rachel Reeves told the BBC’s Sunday With Laura Kuenssberg: “Only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40% of the benefit was felt by 7% of the wealthiest land owners.
“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure.”
But the National Farmers’ Union said that many family farms have a high notional asset value, but very low income and liquidity, which means that the vast majority of owners would be unable to meet the inheritance tax charges, without selling assets.
However, the Government continued to insist the vast majority of farmers will still be able to “pass the family farm down to their children”, following the meeting.
A Government spokesperson said: “Ministers made clear that the vast majority of those claiming relief will not be affected by these changes. They will be able to pass the family farm down to their children just as previous generations have always done.
“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on. We remain committed to working with the NFU and listening to farmers.”
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I wish those same Brexit voting farmers who bemoan UK Labour’s budget had shown the same concern for Wales , its Senedd democracy, and wider economy when they voted to leave the EU robbing Wales of hundreds of millions in EU Structural Funding and allowed the Tories to steal Senedd Brexit powers giving them cart blanche to dictate terms and interfere in areas devolved.
Presumably they can be gifted to the next generation without any tax being due. Which is another loophole that needs closing when most of the rest of the world applies a gift tax or treats gifts above a certain value as ordinary income.
Part of the reason that agricultural land values are as high as they are is precisely because there was no IHT to pay, even Clarkson has admitted that one of the reasons he bought a farm was to avoid IHT. The devil is always in the detail but the panic in family farms may be over blown. “The updated relief can in fact be even more generous for true family farms than the £1m headline. A married couple owning a farm together can split it in two, meaning it qualifies for £2m of agricultural property relief, plus another £500,000 for… Read more »