1 week Ago By David Maddox
Confusion has broken out over how many farms will be affected by Rachel Reeves’ controversial changes to inheritance tax after new figures showed her claims of one in four may be wide of the mark. Figures produced by the Department for Environment, Food and Rural Affairs (Defra) suggest that up to two thirds (66 per cent) of farms could be hit by the tax grab which critics claim will destroy Britain’s family farms. This is in stark contrast to the 28 per cent that the Treasury had claimed with the two departments understood to be at loggerheads over the chancellor’s shock announcement.
Ms Reeves imposed inheritance tax on farm land for the first time since 1992 with 20 per cent rate being paid for all land valued at £1 million or more, although couples can make use of a pooled allowance of £2m plus personal allowances of up to £500,000 each. Defra figures show that the average farm is worth £2.2 million and 66 per cent are worth £1 million or more.
One organisation involved in the mass protest against the tax raid on 19 November has already called for an investigation into the figures. A spokesman for the Countryside Alliance said: “This is a staggering admission by the Minister and it demonstrates that to the Treasury, the countryside and farmers are just an afterthought. With the Treasury figures being so wildly different to Defra’s, an urgent investigation is vital.
As it stands, the Treasury could be open to the accusation of misleading the public. Getting this right in the first instance, as well as carrying out meaningful consultation with the farming sector before Rachel Reeves announced the hated family farm tax at the dispatch box, would have avoided the unnecessary pain that’s been inflicted on so many farmers and their families” The Treasury figures are said to be out of date and based on how many claim APR relief but have excluded many others which claim BPR tax relief. On Monday NFU president Tom Bradshaw told journalists: “They do not understand the immediate impacts this having to intergenerational farms.
Some very, very concerned successful businesses have a parent involved who is in their 80s but the person running the farm is in their 50s. The assets are still in the ownership of the older family member. “We have seen some in ill health who will not live seven years to utilise the gifting rules.
It is unbelievable the pressure they are putting on the industry. To make this change now, to rip the rug out from under the farming industry, I don’t see how they can justify it.” A source close to environment secretary Steve Reed disputed the Defra figures which have been seized on by the NFU saying that the reliefs meant that farms needed to be worth £3 million rather than £1 million to fall foul of the changes.
A Defra spokesperson said: “With public services crumbling and a £22 billion fiscal hole inherited from the previous government, we have made the difficult decision to reform Agricultural Property Relief in a balanced and fair way. “All ministers support the policy and it will not change.”.
