Changes to inheritance tax (IHT) relief on farmland are among the most controversial policies to have been launched by the Labour government.
Chancellor Rachel Reeves used her Autumn Budget to slash agricultural property relief (APR) for inheritance tax, which farmers and rural groups warn will destroy family farms.
The changes may also affect investors who have purchased land for their portfolio as part of their IHT planning.
Rupert Burchett, reflects on the question ‘why are farmers protesting about agricultural property relief changes?‘
The Treasury claims that the majority of farms won’t be affected and suggests that two people with farmland, depending on their circumstances, can pass on up to £3 million without paying any inheritance tax. But rural campaigners dispute this and have accused the government of breaking manifesto pledges to support farming communities.
Rupert adds, “The government campaigned on a promise to give ‘our rural communities their future back’ and were adamant that they would not change agricultural property relief,” says Rupert Burchett, agricultural property solicitor at Payne Hicks Beach.
“These proposals directly contradict those promises.
“Even if you just use bare agricultural land values, 40% of farms will be affected. When you add on the value of farmhouses, diversified farm buildings and so on, that figure skyrockets.
“There is a real and understandable sense of betrayal in our rural communities. It doesn’t matter how many times the prime minister repeats that the vast majority of farms and farmers will be unaffected – the government’s own figures show that this simply isn’t the case.
“Many farmers are now beginning the process of considering how to mitigate the tax burden that will otherwise decimate the future of their and their families’ businesses and livelihoods.”
