Latest news with #FamilyFarmTax
The Herald Scotland
18-06-2025
- Business
- The Herald Scotland
How do inheritance tax changes impact farms and businesses?
Announced in October 2024, the Chancellor has been told the changes will lead to a reduction in tax receipts to the UK of almost £1.9 billion. Meanwhile, a Gross Value Added (GVA) - an economic indicator measuring the contribution of industry to the economy - could reduce by £15bn across the UK. Inheritance tax Inheritance tax is currently charged at 40% on the property, possessions and money of someone who has died, where assets are above the £325,000. The tax only impacts additional assets, so if a firm was worth £330,000 - only the additional £5,000 would be subject to inheritance tax. Read more: The Chancellor has said the threshold will remain in place until at least 2030. It raises around £7bn for the Treasury each year. Changes to exemptions are coming The UK Government announced in the autumn budget in October last year that it would restrict inheritance tax relief for agricultural and business property relief - often abbreviated to APR and BPR. Since the policy changes were announced, it has caused significant uncertainty and drawn criticism from across the industries. There have been protests across the country, at the UK and Scottish Parliaments, with particular warnings against what is described as the 'Family Farm Tax'. Farmers have warned of a 'food crisis' if family-owned farms are impacted by the changes. Tractors lined the streets of central London earlier this year, leaving police to step in and place restrictions on the number of tractors allowed at the demonstrations. The inheritance tax changes Farmland and many construction firms are exempt from inheritance tax under APR and BPR. But the Chancellor confirmed the 100% exemption will be lifted and halved from the next financial year. Read more: That means that from April 2026, a tax of 20% will be imposed on assets over £1 million Assets under this will remain exempt. The concern is that while some of the businesses impacted have assets of several million when they are passed down as inheritance, the physical cash that would pay for the tax is low. Businesses therefore warn assets would have to be sold, or staff would be let go from their jobs, unless the Chancellor reverses the plans. The UK Government, however, has said the changes are proportionate and fair and can be paid over 10 years, interest free, to ease the pressure. What are the cost implications? The Chancellor has said the changes to both agricultural and business property relief will bring in around £520m per year, combined. However, it is thought that the economic impact on businesses will be around £15bn GVA. In Scotland, it could be around 15,000 job losses, at a cost of £1.2bn GVA.
Yahoo
11-05-2025
- Politics
- Yahoo
MPs make another attempt to get government to ditch pylon plans
MPs from Suffolk and neighbouring counties have written once again to the UK government in a bid to ditch pylon plans. South Suffolk MP James Cartlidge and Central Suffolk and North Ipswich MP Patrick Spencer have joined in with several other Tory MPs, including leader Kemi Badenoch and Harwich and North Essex MP Sir Bernard Jenkin, to write to Energy Secretary Ed Miliband over Norwich to Tilbury pylon plans. In their letter to Mr Miliband, the MPs said that while they understand the need to expand the UK's grid capacity, they have several concerns over the current proposals. They asked the government to reassess alternatives to the current proposal and not have the pylons go through rural communities. James Cartlidge MP was one of the MPs who signed the letter (Image: Newsquest) The letter said: "Our communities, already struggling under burdensome policies like the Family Farm Tax, are concerned that the current approach fails to consider the realities of rural livelihoods. "This is particularly disappointing considering that whilst substantial investments are being made to deliver offshore infrastructure in other regions, East Anglia has not been afforded equivalent consideration of alternatives to overgrounding. "We have seen from your media appearances over the last few months that you don't seem to care about the impact of these pylons on rural communities, nor understand them." Patrick Spencer MP was one of the signatories to the letter (Image: Newsquest) The letter also spoke of technical evidence and local support for an alternative, saying that "overly stringent and arbitrary Net Zero" targets should not outweigh community mindsets. "We expect your confirmation that all alternatives will now be re-assessed fairly," the letter added. "East Anglia deserves a balanced, transparent process - one that respects residents, businesses, and the environment, rather than imposing inappropriate infrastructure without proper scrutiny." The current pylon plans go from Norwich to Tilbury (Image: National Grid's project director Simon Pepper had previously said that going underground is unlikely to be revisited as research showed that the area's geology did not support the proposal. A spokesperson for National Grid had said that it launched a targeted consultation back in January, which helped identify locations where further changes could potentially be made.
Telegraph
03-05-2025
- Business
- Telegraph
Labour peer under fire for saying ‘farmers with shiny tractors not poor'
A Labour peer has come under fire for saying farmers protesting in Whitehall against the Government's inheritance tax (IHT) raid 'did not look very poor' because of their 'shiny tractors'. Lord Foulkes, a minister under Sir Tony Blair, said that the protesters who had come to Westminster drove 'sparkling, new, expensive tractors'. He suggested that Conservative opposition to the Chancellor Rachel Reeves' raid against farmers was because 'they always want to make the rich even richer'. The remarks prompted fury from farming and rural organisations, who said they only 'widened the divide between countryside and Westminster'. A key argument from the farming community against the IHT raid is that farmers are typically asset rich, but income poor. Challenging a colleague, the Labour peer told the House of Lords on Thursday: 'Did my noble friend notice that, when the farmers blocked Whitehall with their tractors – sparkling, new, expensive tractors – they did not look very poor? 'Has he noticed that, when the Tories talk about tax, they always want to make the rich even richer?' Victoria Atkins, the shadow environment secretary, said: 'This Labour peer has revealed what Labour really thinks about the countryside: that all family farmers must be rich and Labour is happy to tax them out of existence. 'Labour ministers' excuses for pushing through the vindictive Family Farm Tax don't add up but they don't care. With their super majority, city-dwelling ministers have calculated they can target and tax the countryside and family businesses.' The Government has so far refused a U-turn on its planned changes to agricultural property relief, which would introduce a 20 per cent inheritance tax on estates worth more than £1 million. Farming and rural organisations have said the tax could be ruinous for family businesses and risks creating a mental health crisis among older farmers. Mo Metcalf-Fisher, director of external affairs at the Countryside Alliance, accused Lord Foulkes of being 'out of touch'. He told The Telegraph: 'The family farm tax and general government approach to rural policy so far is clearly damaging Labour's reputation in rural areas. 'I suspect there are numerous Labour rural MPs that shudder when colleagues deliver such out-of-touch commentary. 'There is a concern within the countryside that many in Labour are pursuing this dangerous tax for ideological kicks and comments like this only widen the divide between countryside and Westminster'. Tom Bradshaw, the president of the National Farmers' Union, said: 'Trying to link having a valuable machine which is part of the working capital of the farm, often on higher purchase rather than owned outright, it feels like they're looking for excuses not to change rather than recognising the genuine problems.' It comes after Labour lost more than 180 councillors in the local elections, with Reform UK making sweeping gains in rural areas such as Lincolnshire. In response to Lord Foulkes' remarks, Lord Livermore, Labour's growth minister in the Lords, said: 'It is incredibly important that the decisions we take make the tax system fairer and more sustainable, and I believe that is absolutely what we are doing. 'Despite a very tough fiscal context, we are maintaining considerably more generous reliefs in this sector than exist anywhere else in the tax system.'
