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Welsh farmers ‘threatened’ by changes to inheritance tax

05 Nov 2024 3 minute read
First Minister Eluned Morgan during FMQs

Family farms in Wales are under threat because of the UK Labour government’s Budget, opposition groups in the Senedd have said.

First Minister Eluned Morgan was forced to defend the plans – which includes fresh inheritance tax measures for farmers – during First Minister’s Questions on Tuesday.

Opposition politicians in the Senedd lined up to criticise the policy, warning it could “threaten” farms across the country and branded the Budget a “brutal betrayal”.

‘Noise’

But Baroness Morgan said there had been “a lot of noise” about the policy, and insisted the “vast majority of farms will not have to pay”.

Under the plans, inheritance tax will be charged at 20% on farms worth more than £1 million, although Chancellor Rachel Reeves has said that in some cases the threshold could in practice be about £3 million.

The move has sparked considerable backlash in the farming industry, with disputes over how many businesses would be affected.

Mass protests

It also comes after agricultural families held mass protests outside the Welsh Parliament earlier this year over planned changes for grant funding to farmers, with some fearing it could put them out of business.

Following the backlash, the Welsh government delayed the “sustainable farming scheme” (SFS) grant changes.

Plaid Cymru’s deputy leader, Delyth Jewell, said farmers felt “betrayed” by the Budget while speaking at FMQs.

She said: “Despite the promise that Labour wouldn’t change the inheritance tax rules on agriculture, that is exactly what’s happened.

“It’s little wonder that farmers are feeling betrayed because this new policy threatens the future of many Welsh family farms.”

She argued the policy should not be taken in isolation, with farmers suffering increased costs, bovine TB infections and uncertainty over the SFS.

“They are all taking their toll financially and emotionally,” she said, “It’s an industry in Wales made up of families, many of whom are struggling.”

Ms Jewell said there was also no commitment to fair funding for Wales, no mention of additional HS2 funding in the Budget and accusing the UK government of continuing with austerity.

‘Brutal’

Welsh Conservatives leader Andrew RT Davies branded it a “Budget of broken promises and brutal betrayal”.

He argued the Prime Minister had previously promised there were no plans to change agricultural property relief, and the move would bring “anger, concern and fear”.

The First Minister said the Welsh government’s “initial assessment is that the vast majority of farms in Wales will not have to pay” and insisted there had been “a lot of noise” surrounding the policy.

“The vast majority of farms in Wales will not have to pay this tax,” Baroness Morgan said.

“The fact is that the rest of the population have to pay inheritance tax, and there is a huge allowance when it comes to the agricultural community.

“What we’re talking about here is extremely large and wealthy farms, and obviously, we will work through the details of this.”

She insisted Labour was interested in making sure there was support for people who work on farms, calling the increase to the living wage “significant”.

She also said the Chancellor had announced an extra £1.7 billion for Wales in the Budget, which would “help to rebuild our public services” and insisted “austerity has ended”.


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Llyn
Llyn
28 days ago

Plaid attacked the Budget for not raising taxes by taxing the rich and now they are attacking the UK government (and siding with the Tories, Reform UK and the Daily Mail) for taxing farmers with £1 million and above assets!

Gareth
Gareth
28 days ago

Great maths by Labour, they say they are giving us an extra £1.7 billion, when in fact, by denying us the £4 billion HS2 money they are short changing us by £2.3 billion, £4 + £1.7 = £5.7 billion. The Drakeford insurance policy rip off strikes again.

Ap Kenneth
28 days ago

If these values are near correct in Wales Arable land: £8,500 per acre Pasture: £6,000 per acre Hill ground: £1,000 per acre  then £1M exemption would be 117 acres for arable, 166 acres for pasture, and 1,000 acres of hill land. A husband and wife partnership would double the exemption and the acres covered. The house would have a seperate exemption. Use gifting before you age to the successor and most farms will pay diddly squat. There are lots of wealthy people that wish they had access to a £3M exemption and a 20% tax bill (its 40% for the… Read more »

Billy James
Billy James
28 days ago

Has Baroness Morgan given up her lords title yet then?

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