Farming Unions have come together to warn the Chancellor of the Exchequer about the potential impact of changes to inheritance tax (IHT), including Agricultural Property Relief (APR) and Business Property Relief (BPR).
Both forms of relief enable working farm businesses to be passed down to the next generation without incurring inheritance tax charges, which many would be unable to pay without selling the businesses. APR, in particular, helps farmers renting land within their business, covering some 64% of the industry.
The NFU is incredibly concerned about the potential changes, it states, which it believes would be in direct conflict with the commitment Defra Secretary of State Steve Reed MP made last year, that Labour “have no intention of changing APR”.
NFU President Tom Bradshaw said: “Let me be clear; changes to APR and BPR would be a devastating blow to British farming as we know it, the effects of which will be felt for generations to come. It’s hard to see anything which would destroy the new government’s relationship with farmers more completely, or do more damage to family farm businesses, be they the owners of farms or the tenants who farm them for the landlord.
“The NFU, alongside other farming organisations, has set out to the Chancellor how IHT reliefs underpin viable working farming businesses, of all shapes and sizes. Whether that’s large or small family farms, tenant farms or contracting businesses, almost every business producing food for the nation’s tables would be impacted. The average return of working farm businesses is less than 1%. Most would be unable to meet inheritance tax charges if APR or BPR was stripped away.
“Changes to vital IHT reliefs for farm businesses don’t only threaten our food security, but also the shared ambition with government to protect and enhance our environment. Without the farm businesses there to manage the land and invest in environmental and biodiversity delivery, legislated targets could be in jeopardy.
“For the future of our family farms, food security and the environment we are calling on the Chancellor to urgently consider the sizable effect changes to APR and BPR could have. Farmers have been let down year after year by empty words and policies that negatively impact their businesses, I am imploring the Chancellor, don’t let that happen again on 30th October.”