logo
Labour backbenchers call for ‘meaningful tweaks' to farm inheritance tax plan

Labour backbenchers call for ‘meaningful tweaks' to farm inheritance tax plan

Independent10-02-2025

Chancellor Rachel Reeves has faced calls for 'meaningful tweaks' to planned inheritance tax on farmland from Labour MPs.
Sam Rushworth said that farmers who work a £5 million estate are 'not millionaires', while Julia Buckley said sector businesses currently face a choice to 'go big or go bust'.
Conservative former Scottish secretary David Mundell warned that under plans to impose inheritance tax on agricultural property worth more than £1 million, farmers' children will sell their land to private equity firms to cover the bill, and estates would instead be used for solar panels or industrial tree planting.
They made their comments during a debate about a House of Commons petition which called on Treasury ministers to carry on with a 100% relief from inheritance tax covering agricultural property.
The discussion began just minutes after the petition gathered its 150,000th signature, and while farmers lined Whitehall and Parliament Square outside the Palace of Westminster, blasting their horns to the tune of Old MacDonald Had A Farm and Europe's number-one hit The Final Countdown.
Mr Rushworth told MPs: 'If you inherit a £5 million farm, you're not a millionaire, you're the custodian of agricultural land with the responsibility to farm it to produce food for the nation.'
The MP for Bishop Auckland suggested the previous government could have better supported 'things like trade deals, supply chains, flood defences and on crime', adding: 'They want to stop billionaires, to quote The Telegraph, from hoovering up agricultural land which they know is pushing up land prices.
'And they even support the principle of paying tax and raising revenue for the Treasury, because they know that Treasury revenue is necessary to improve the NHS and to improve schools in their communities, as well as a strong agricultural budget.
'But they are asking, and they're not asking, by the way, for a full U-turn, but they are asking for some meaningful tweaks that will help the policy to better target the goals that it intends to achieve.'
He said that the £1 million threshold, with inheritance tax applied at a rate of 20% above on land worth more than this from April 2026, 'is quite low'.
Ms Buckley said: 'My farmers in my Shrewsbury constituency have told me that for many years now, they've struggled to make a profit.
'Indeed, they say the only game in town is to go big or go bust, in other words, 12,000 small farmers have gone under because over the last decade, it's not been a profitable business.
'And they say to me that they're ready to make some of these behavioural changes to pass the asset down to the next generation, so it can be profitable and sustainable and environmentally friendly, because that next generation have just come out of agricultural college and learned all these new techniques.'
David Smith, the Labour MP for North Northumberland, said that few farms in his constituency would fall below the £1 million threshold and be exempted from the tax.
'The value of the land is often not bearing a relation to the limited cashflow or profit that is being made,' he said, adding that 'raising the threshold would provide instant peace of mind to family farmers'.
Mr Smith also suggested an 'active farmer test' using Government data to 'judge if the land is being put to public use', and proposed a 'clawback' system so the Treasury could charge for the relief if a farmer's beneficiary sells the land within a short period of time after a death.
Mr Mundell warned farms 'will not be sold to new family farmers'.
He continued: 'They will be sold to these very private equity firms who want not to produce food on our land, but want to actually maximise other tax benefits that they can do under carbon offset and other environmental tax benefits that they get.
'And in addition to that, they don't employ anyone.'
Turning to the issue of tax planning, Liberal Democrat MP Sarah Dyke warned some older farmers might find it difficult to swerve an expensive bill by putting in place 'the transitional restructure to their affairs', for example, by gifting property to their heirs more than seven years before they die.
The MP for Glastonbury and Somerton sighed after she told MPs: 'The stress this is putting on those families, I myself am from a farming family.
'My mother is 81, my father died just about a year ago.
'The pressure this is putting on her to think whether she can survive another seven years is so distressing and I know she is not alone.'
Conservative shadow environment minister Robbie Moore described the policy as 'purposefully vindictive', adding: 'The Government's actual intent is to send a strong message out to our farmers that they are not needed, that they do not matter, that they do not play a vital part in our national agenda.'
Responding, Treasury minister James Murray warned the current inheritance tax exemption for farmers is 'skewed towards the wealthiest estates', with 117 estates claiming £219 million of relief according to the latest Government data.
He said: 'What has driven the Government in making the decision to reform agricultural and business property relief is the overwhelming priority of fixing the public finances whilst doing so in a way that is fair and sustainable.'
Mr Murray added the Government had committed £5 billion to farming over the next two years, £60 million to help farmers affected by wet weather last year, and £2.4 billion over two years to help rebuild 'crumbling flood defences'.
He recalled 'media speculation' before last October's budget that the Government might axe the reliefs altogether, and said the Treasury had considered representations from the farming sector 'in reaction to that speculation'.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Tricks to keep FULL £300 winter fuel allowance: JEFF PRESTRIDGE's guide to Labour's U-turn
Tricks to keep FULL £300 winter fuel allowance: JEFF PRESTRIDGE's guide to Labour's U-turn

Daily Mail​

time36 minutes ago

  • Daily Mail​

Tricks to keep FULL £300 winter fuel allowance: JEFF PRESTRIDGE's guide to Labour's U-turn

What a bugger's muddle.' That is the term my late mother would have used to describe Labour's decision on Monday to unravel last year's clampdown on winter fuel payments to pensioners. And it is a phrase that keeps crashing into my mind as I get to grips with the financial mechanics behind Labour's decision to rip up last year's rules governing who does and who doesn't get the payment – and start all over again.

Wales tipped to get £445m for rail projects in Spending Review this week
Wales tipped to get £445m for rail projects in Spending Review this week

North Wales Live

time37 minutes ago

  • North Wales Live

Wales tipped to get £445m for rail projects in Spending Review this week

UK Government is set to announce £445m for rail projects in Wales. Chancellor Rachel Reeves is expected to make the announcement at the Spending Review on Wednesday. This comes after a week in which the UK Labour Government has been under attack from Plaid Cymru and other opponents over its decision to classify a new rail line between Oxford and Cambridge as a England and Wales project. This means that any money spent on it will trigger extra payments to Scotland and Northern Ireland so they can spend it on their transport systems, but not Wales. But North Wales Live understands that there will be a boost for rail in Wales at the review - aimed at driving growth. At least £445 million is set to be spent on rail projects in north and south Wales to enhance connectivity between cities, towns, and centres of advanced manufacturing. The money will be spent on fixing level crossings, building new stations, and upgrading existing lines, and is understood to be a combination of direct funding and money for the Welsh Government. Last month the Welsh Government announced a 15 point plan to improve rail services in North Wales but there were questions over how it would be funded. A Treasury source said: 'With this Government Wales will thrive, and the Chancellor has prioritised bringing forward a package that has the potential to be truly transformative.' A source said the strategic rail investment forms the cornerstone of a UK Government plan to address decades of underinvestment in critical infrastructure that has held back the Welsh economy. But a Plaid Cymru spokesperson on Transport attacked the UK Government for its decision to reclassify the £6.6bn East West Rail as an England and Wales project. Peredur Owen Griffiths MS said: 'The UK Labour Government's decision to reclassify the Oxford to Cambridge rail link as an England and Wales project is one of the most egregious examples of the Westminster government working against the best interests of the people of Wales. 'Despite the project being previously classified as an England project in the 2020, 2021, 2023 and 2024 editions of the UK Government's Statement of Funding Policies, meaning Wales received a consequential – Labour have moved the goal posts and is now choosing to deny Wales much needed investment. 'For all we know, this decision could result in Welsh rail projects losing out or not happen at all because of Wales being denied its share of funding."

Rachel Reeves is set to announce at least £445 million for Welsh transport in spending review
Rachel Reeves is set to announce at least £445 million for Welsh transport in spending review

ITV News

time39 minutes ago

  • ITV News

Rachel Reeves is set to announce at least £445 million for Welsh transport in spending review

Chancellor Rachel Reeves is expected to announce major Welsh transport upgrades in her Spending Review. At least £445 million is set to be spent on rail projects in north and south Wales to enhance connectivity between cities, towns, and centres. The money will be used to fix level crossings, build new stations and upgrade existing lines. It is understood to be a combination of direct funding and money for the Welsh Government. The Treasury said: 'With this Government Wales will thrive, and the Chancellor has prioritised bringing forward a package that has the potential to be truly transformative.' An unnamed Labour Party source has said that the "historic investment is down to the tireless work of the Welsh Secretary, Jo Stevens, who has delivered Labour's promise to right the chronic underfunding of Welsh rail by the Tories."The source added: "This investment is more than Wales would have had so far had HS2 been Barnettised. It will make a massive difference economically and politically." Talking on ITV Wales' Sharp End about the announcement, Peter Fox, a Welsh Conservative MS said: 'Its not enough, its no where near enough.' 'We are suppose to be grateful that we are getting the funding, this is not good news for Wales. We should be angry.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store