Latest news with #BusinessPropertyRelief
Agriland
4 days ago
- Business
- Agriland
More backlash to publication of UK draft inheritance tax policy
The CLA has strongly criticised the UK government's impact assessment of changes to inheritance tax published this week along with the draft legislation of the policy. The government has claimed capping vital inheritance tax reliefs for farmers and family businesses will not have "any significant macroeconomic impacts". The reforms are due to come into force in April 2026, with the government arguing it "is not expected to have a material impact on food security" and "would not be expected to impact the UK's ability to source imports from international markets". The Country Land and Business Association (CLA) has argued that there will be drastic consequences for landowners, and has offered an alternative via the 'clawback' mechanism. CLA president Victoria Vyvyan said: 'This government is incapable of listening. The ending of vital inheritance tax reliefs will crush farming and family businesses, but the Treasury remains deaf, blind and indifferent to the damage to the economy. 'The CLA has made clear, and costed, the consequences of this ideological folly; the loss of jobs, the reduction in GVA [gross value added]. "Together the industry has offered a sensible alternative via the 'clawback' mechanism. The Treasury has given no reason for failing to consider an alternative. 'This is not an impact assessment; it reads like an amateur note from an arrogant government setting and marking its own homework and simply not understanding businesses and food security," she added. The CLA claimed that the new measures are a tax burden on businesses which were delivered without consultation and with little engagement. "Farmers and family businesses are the backbone of the economy and deserve to be heard by a government that seems hell-bent on pressing ahead, indifferent to the slow but inevitable train crash," Vyvyan added. Meanwhile, Upper Bann MP Carla Lockhart said she is "outraged" following this week's unveiling of the draft legislation, which includes measures to reform Agricultural Property Relief (APR) and Business Property Relief (BPR). She said: 'The Labour government is not listening to the electorate. The chancellor outlined her intentions in the autumn budget, and from the outset I have been strongly opposed to the proposals aimed at axing historical APR and BPR. 'Existing legislation was introduced by a previous Labour government to protect family businesses during periods of national economic turmoil. "The current Labour government wants to levy a 20% 'death tax' on farm business assets over the £1 million threshold," she said. Carla Lockhart MP The MP claimed that the government and Labour Party chancellor have set themselves on a "collision course" to destroy family farms in the UK. 'Chancellor Rachel Reeves is etching her name in the history books for all the wrong reasons, creating a lasting legacy that will long out-live the current Labour leadership," Lockhart said. 'The Finance Bill presents another opportunity for the government to step-back and rethink its draft tax clauses." The Upper Bann MP has stated that the UK economy is struggling and claimed that the chancellor is willing to sacrifice the country's £48 billion agri-food sector which provides employment for over four million people. 'Sir Keir Starmer and the chancellor are ignoring legitimate concerns and refusing to participate in roundtable talks," Lockhart continued. "They cannot continue to dismiss genuine calls for a more balanced and practical way forward.' The DUP Agriculture, Environment and Rural Affairs spokesperson, continued: 'The evidence is overwhelming with numerous experts confirming that the government's figures are mis-calculated. 'The £1 million threshold is too low, especially when the value of farmland, sheds, livestock etc is taken into account. Small farms in Northern Ireland can easily exceed that figure. 'For years farmers have been encouraged to modernise, diversify and invest to expand their businesses, but now they are being penalised unfairly by this vindictive 'tax grab', a move which will destroy generations of family farms," she added. Lockhart is also supportive of a 'clawback' mechanism designed to increase Treasury revenue, while protecting working family farms.
Yahoo
31-07-2025
- Business
- Yahoo
Inheritance tax nets record £6.7bn before Budget raid
The Exchequer raked in a record £6.7bn in inheritance tax between 2022 and 2023, as a longstanding freeze on the tax-free threshold and ballooning asset prices meant more estates were sucked in to paying the unpopular levy. The overall earnings from inheritance tax rose by over £700m in the tax year 2022/3, official data showed, a year on year jump of 12 per cent. HMRC attributed much of the added haul derived from more estates becoming liable to the duty thanks to thresholds remaining frozen at £325,000 since 2021. As many as 13 per cent more households were liable to the levy in the most recent official numbers from the UK's customs authority, taking the total number of estates that paid an IHT bill to 31,500. The figures, which come on the back of a similarly large jump in the 2021/22 year, are the latest evidence of the tax making up an increasingly large share of Treasury earnings. Receipts have more than doubled in the space of a decade, and are expected to rise even more sharply in the coming years, after the Chancellor removed several reliefs on the levy at her maiden Budget last October. Budget to drive higher inheritance tax bills The majority of additional revenues – due to kick in 2027 – will come from the government's telegraphed move to bring pension pots into the scope of inheritance. Until Rachel Reeves' maiden fiscal event last year, savers' nest eggs had escaped being subject to the levy. Claire Trott, head of advice at St James's Place, said that change alone was likely to mean an additional 10,500 estates will pay inheritance tax; a 55 per cent increase over just five years. The government also chose to end the decades-old Agricultural Property Relief and Business Property Relief carve-outs, that had previously allowed owners of farmland and family businesses to pass down their assets without paying the levy. They are expected to raise a further £500m annually for the Treasury. But the changes proved immensely unpopular and sparked a string of protests across the country. Farmers and Labour's political opponents branded the overhaul the 'family farm tax', and a cross-bench group of MPs recently called for the changes to be delayed by a year, while families adjusted their tax affairs. Pete Fairchild, head of private clients at professional services firm Crowe, said the swath of changes had resulted in abrupt behavioural responses from clients looking to adjust formerly tax-efficient plans. 'More individuals are reverting to seeing their pension pot as a vehicle to provide income in retirement, as opposed to an IHT planning opportunity,' he said. 'We are seeing more lifetime giving as people look to pass on their wealth and survive seven years to reduce their chargeable estate. 'Many clients have taken their 25 per cent tax-free lump sum from their pension and gifted that immediately to their children.' A spokesman for the Treasury said nine in 10 estates will continue to pay no inheritance tax by 2030. He added: 'The tough but necessary decisions we've taken on tax mean we could protect working people's payslips from higher taxes, invest record amounts into the NHS, defence and other public services while keeping bus fares at £3 and expanding free school meals.'
Yahoo
29-07-2025
- Business
- Yahoo
SME Construction data casts doubt on UK ability to hit 1.5 million homes
The number of struggling construction firms has risen further despite heavy pressure on the sector to deliver hundreds of thousands of new homes. The number of firms in critical distress – a measure of firms nearing bankruptcy – rose 15.8 per cent in the second quarter of 2025, according to Begbies Traynor, while the number of construction firms in critical and significant financial distress topped charts in the first quarter, at 6,830 and 97,603 firms respectively. 'SMEs are grappling with a range of cost pressures, including strict environmental regulations and burdensome taxes on employers. These cost pressures are making it increasingly harder – not easier – to build,' Steven Mulholland, CEO of the Construction Plant-hire Association (CPA), said. The industry was the slowest growing sector of the UK economy in the first quarter of 2025, and total construction output stagnated in this period – ending three consecutive quarters of growth as activity across real estate softened. 'Employer National Insurance hikes have already hit jobs and investment. Now, looming changes to Business Property Relief risk being the final blow – threatening 200,000 jobs and £15 billion to the economy, and punishing the very firms Britain needs to deliver growth, infrastructure and homes,' Mulholland added. 'Without urgent reform, we won't just miss housing targets – we'll lose the wider supply chain capable of building the vital infrastructure Britain needs,' he said. Construction firms in 'a difficult position' Kelly Boorman, National Head of Construction at RSM UK, has warned that the combination of high financial distress in the industry and the government's housing push puts the sector in a tough place. The government has pledged billions to support housebuilders, something which has been largely helped by the industry, but Boorman warned business could fall into an 'overtrading trap'. 'There's the risk [they]… take on more work than their supply chains and operational capacity can support,' Boorman said. 'Mandatory housing targets and expectations to commit to large infrastructure projects could result in businesses being unable to meet demand, despite the government's commitment to investment, training and pipeline visibility,' she added. Experts have warned that there are still significant planning and delivery challenges that developers are facing alongside cost pressures, including skills shortages – despite recent investments – wage inflation, raw materials shortages and inflation.
Business News Wales
23-07-2025
- Business
- Business News Wales
Prepare Now for this Generational Shift in Rural Business Planning
In keeping with a now-familiar pattern of sudden and short-sighted announcements, the UK Government has published draft legislation confirming its planned reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR). First proposed in the Autumn 2024 Budget, these changes will see relief fall from 100% to 50% on any qualifying value above £1 million, effectively opening up farming families and diversified rural businesses to a level of inheritance tax exposure unseen for generations. And let's be clear, a £1 million threshold is all but meaningless in the context of modern farming. The capital required to operate even a modestly sized agricultural business far exceeds that figure. This is not a tax on excess; it is a tax on resilience, on succession, and ultimately, on viability. Many had hoped the Government would reconsider. As we saw with winter fuel payments and disability benefits, it has proved willing to change course under pressure. Rural communities were right to expect the same recognition for the essential contribution they make to national life – securing our food supply, improving public health, sequestering carbon and reversing biodiversity loss. These aren't peripheral goals, but foundational to the UK's ability to withstand and adapt to global pressures and the existential threats that we face today. Our call in October 2024 was that Ministers would grasp the scale of these implications ahead of the reforms taking effect in April 2026, and use the time to deliver a more coherent policy framework – one that supported the farm businesses at the heart of delivering solutions to so many of society's big issues, provide investors with confidence and ensure that land managers were equipped to meet the multiple, and often competing, demands of food production, climate action, environmental enhancement and community value. This publication suggests otherwise. The protests seen across the UK – tractor convoys in Westminster and widespread public support – made it clear that this was not a niche concern. They helped the country pause and reflect on the vital role our farmers play. Unfortunately, that message seems to have fallen on deaf ears. We do not underestimate the Government's task in balancing the books. But it is particularly surprising to see the lack of response to the business community, which has made plain the impact on jobs and the broader consequences of this policy. The reality is that BPR, not APR, is the true time bomb here. That Ministers have ignored the wider business lobby, at a time when they are also championing growth and innovation, is a contradiction they have yet to reconcile. These were, after all, Labour-originated reliefs, introduced during periods of national economic stress to help family businesses underpin the recovery. It is disheartening to see that history forgotten. The impact will be uneven but serious. Long-standing family businesses, encouraged to diversify, to modernise, to innovate and lead on environmental delivery, now face a triple bind: higher tax, reduced support and rising operational pressure. And while tenant farmers will not face inheritance tax on land they farm, they will be hit by the changes to BPR and pensions and the knock-on effects on landlords and future tenancies cannot be ignored. At a time when the sector is already struggling, due to rising costs, labour shortages, and policy volatility this legislation risks being the final straw for some. Looking forward, the timeline for action is narrowing. While we will continue to advocate for a more balanced and supportive approach, landowners must now focus on preparation. That means understanding the value of their holdings and financial implications of the tax charge, stress-testing succession plans and the business restructuring that may be necessary as part of these, assessing practical options, such as the use of conditional exemption and lifetime gifts, reviewing trust arrangements, and understanding how life insurance might help. While this may prove to be the biggest generational shift in rural business planning for decades, there are options, which Knight Frank is supporting clients to navigate. For those not already focused on this issue now is the time to act. Being prepared for what is coming is essential.
ITV News
27-06-2025
- Business
- ITV News
Inheritance tax poses difficult decisions for Northern Ireland farmers
Getting your head around numbers can sometimes be a difficult task. Even more so when it comes to exactly what Northern Ireland's farming community has had to do though, in just a few the end of 2024, the Labour government said it was going to remove relief on inheritance tax for farmers. From April 2026, agricultural assets which total over £1m will be taxed at a rate of 20%.That includes animals, buildings and land - with change now looming for many farms in Northern have been exempt from Agricultural Property Relief and Business Property Relief for many years but that could now be was a decision not welcomed by many farmers then, and even now, including dairy farmer Keith runs a large operation just outside of Newry, Co Down.'The simple fact is that the sector isn't profitable enough whenever you count the valuation of property, to be able to sustain this for one generation, never mind two.'Keith spoke to UTV at Markethill Livestock Sales in Co Armagh. Dairy and beef cattle were being sold on the day of filming and interest was still strong, but under it all, lay concern for what the future Hewitt is the man behind the microphone and the man who coordinates the sales. 'They (the government) have brought these proposals in, genuinely without thinking about it and not realising the knock-on effect,' he added that he was worried about the 'long-term' effects on farmers and other way farms can be exempt from the new proposals is if the family farm is gifted, but the donor must live on it for seven years Kinnear was forced into adapting, not by his own father John died in 2017, leaving the family farm in Derrynoose to his mother Shirley before she passed it on to Timothy.'Something so simple can absolutely obliterate farming,' he told UTV.'If they (the government) don't watch themselves, they will do away with Irish produce.'If inheritance tax hit me today, I would have to sell a third of the place and if I was to sell a third of the place there wouldn't be enough income to support me or if I was to have a future family.'The Ulster Farmers' Union is urging the government to take on the concerns of farmers in Northern Ireland.'It is gut-wrenching and really does pull on the heartstrings, some of the things which farmers are actually considering,' said James McCluggage from the union.'We need to see some sort of morality clause in there for the elderly, for the disabled, for those who are incapacitated, that [sic] can't make a decision or cannot get plans in place at the moment.'The government says the changes won't affect every farmer and that they are necessary to better fund public a statement, a spokesperson for the Department for Environment, Food and Rural Affairs said: 'Our commitment to farming and food security is steadfast, which is why we've allocated a record £11.8billion to sustainable farming and food production over this parliament. 'We are also slashing costs and red tape for food producers to export to the EU, have appointed former NFU president Baroness Minette Batters to recommend reforms to boost farmers' profits, and we're ensuring farmers get a bigger share of food contracts across our schools, hospitals, and prisons.'For now, the industry looks determined to continue speaking up as farmers prepare to count the cost of change, whatever it may be. On Friday UTV were joined by Agriculture Minister Andrew Muir to address the central issues within the farming community.
