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Starmer defends inheritance tax changes as row with farmers ramps up

15 Nov 2024 2 minute read
Prime Minister Keir Starmer. Image: Carl Court/PA Wire

Sir Keir Starmer has again defended changes to inheritance tax for farms, insisting that most will be unaffected and that the Government just needs to “keep explaining” how it will work.

A row has erupted over the taxes for farms worth more than £1 million, exacerbated by uncertainty about the figures Chancellor Rachel Reeves based the decision on.

Treasury data shows that around three quarters of farmers will pay nothing in inheritance tax as a result of the controversial changes announced in the Budget last month.

But farmers have challenged the figures, pointing instead to data from Defra which suggests 66% of farm businesses are worth more than the £1 million threshold at which inheritance tax will now have to be paid.

Anxious

The Prime Minister said during a visit to north Wales on Friday: “I know some farmers are anxious about the inheritance tax rules that we brought in two weeks ago.

“What I would say about that is, once you add the £1 million for the farm land to the £1 million that is exempt for your spouse, for most couples with a farm wanting to hand on to their children, it’s £3 million before anybody pays a penny in inheritance tax.

“And that is why the vast majority of farms are going to be totally unaffected by this. And it’s really important we get that through.”

He added: “So we just need to keep explaining how that works, because I know it’s caused some anxiety.”

The inheritance tax changes for farming businesses in the Budget limit the 100% relief for farms to only the first £1 million of combined agricultural and business property.

Tractors

For anything above that, landowners will pay a 20% tax rate, rather than the standard 40% rate of inheritance tax (IHT) applied to other land and property.

On Saturday, farmers in north Wales will gather on tractors for a protest against the changes in Llandudno to coincide with the Welsh Labour Conference.

The National Farmers’ Union (NFU) is holding a mass lobby of MPs on Tuesday as part of efforts to force a Government rethink and a separate rally is taking place on the same day on Whitehall, opposite Downing Street.


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Llyn
Llyn
16 days ago

If in a partnership there’ll be no payments for properties below 3 million and if a farmer transfers property 7yrs before death no inheritance tax at all. The normal working man and woman gets nothing like that.

Bankers and millionaires using the current system to dodge paying tax for the NHS and schools and ramping up the cost of agricultural land. No idea why supposed socialists Plaid are their useful little helpers?

Y Cymro
Y Cymro
16 days ago

I’m torn. Angry at Welsh farmers for stupidly voting for Brexit that’s made theirs & our lives more difficult, not only financially but democratically, an act of self-harm that facilitated both the Tory & Labour to interfere & undermine Welsh devolution, especially seeing our Senedd & Welsh Government was excluded from trade deal discussions signed with Australia & New Zealand that will flood Wales & Britain with cheaper lamb & beef products undercutting our farmers. Also I’m equally frustrated at increasingly authoritarian UK Labour for trying to squeeze blood out of a stone by removing winter fuel allowance from pensioners,… Read more »

Last edited 16 days ago by Y Cymro
Dolgoch
Dolgoch
15 days ago

Under the reforms to inheritance tax relief on agricultural land proposed in the budget, about 500 individuals who inherit land worth more than £2m (£3m if they were married to the deceased) will join the rest of society and have inheritance tax levied on their bequest – albeit at half the rate, with an enlarged exemption and 10 years to pay it, concessions not made to the rest of us. How fortunate and privileged are they?

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