Reversing plans to charge inheritance tax on farms is “the only sensible course of action”, the head of the National Farmers’ Union has said as he prepares for crunch talks with the Environment Secretary.
NFU president Tom Bradshaw is to meet Steve Reed on Monday amid a growing furore over the Chancellor’s decision to make farms subject to inheritance tax.
Under plans announced at the Budget, inheritance tax will be charged at 20% on farms worth more than £1 million, although the Chancellor has said in some cases the threshold could in practice be around £3 million.
But writing in the Daily Telegraph, Mr Bradshaw said the prospect of being unable to pass their businesses on to their children would be “the final straw” for many farmers.
He said: “The vast majority of the people who will bear the brunt of this decision aren’t wealthy people with huge cash reserves hidden away.
“They are families that have often spent generations building up their farm businesses to provide food for the nation, often on very tight profit margins.
“Their businesses have struggled through all the changes caused by Brexit, they’ve suffered years of being squeezed to the lowest margins imaginable, with costs of production skyrocketing, they’ve been battered by increasingly extreme weather conditions. They have nothing left to give.”
Tax experts have suggested the changes could affect fewer than 500 farms a year, once the tax thresholds and farmers giving their property to their children before they die are taken into account.
But Mr Bradshaw said the Treasury had a “completely skewed view of the structure of farming in the UK”.
He said: “Very few viable farms are worth under £1 million. That could buy you 50 acres and a house today. No viable food-producing business is 50 acres. The average farm in the UK is more than 250 acres.
“The only sensible course of action for the future of family farms across the country, as well as for the sake of Britain’s food security and our legislated environmental targets, is to reverse this decision.”
Chancellor Rachel Reeves told the BBC’s Sunday With Laura Kuenssberg: “Only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40% of the benefit was felt by 7% of the wealthiest land owners.
“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure.”
