The “completely unfair” change to inheritance tax for farms has left farmers across the UK worried for their future, the head of the National Farmers’ Union has said.
NFU president Tom Bradshaw said he had never seen “the weight of support, the strength of feeling and anger” over the plans to impose inheritance tax on farms worth more than £1 million, and added that many farmers wanted to be “militant” over the issue.
Under plans announced in the Budget, inheritance tax will be charged at 20% on farms worth more than £1 million, although the Chancellor has said that in some cases the threshold could in practice be about £3 million.
The move has caused a considerable backlash from farming and countryside communities, and led to a dispute over just how many farms and farm businesses would be affected.
Speaking after a meeting with Environment Secretary Steve Reed and Exchequer Secretary to the Treasury James Murray, Mr Bradshaw challenged the figures from the Treasury, that only a minority of farms would be affected.
He told the PA news agency: “Obviously, we fully dispute the figures the Treasury has been using and we’ve played back Defra’s own figures.
“So, the Treasury is saying only 27% of farms will be within scope of these changes, Defra’s own figures suggest that two-thirds of farms will be in scope.
“How they can have that wide a discrepancy within Government is quite unbelievable.”
He said there had been no resolution on the issue, adding: “We’ve made very passionately our perception clear, that this tax change is completely unfair.
“It had been ruled out by the secretary of state in the run-up to the election and now there are many family farms right across the United Kingdom that are worried for their future.”
He said he had been receiving calls from people in their middle age who have been running successful businesses, but whose parents were still in the family house and partners in the business, and might not live for seven years – the minimum time after a transfer of assets for inheritance tax not to apply.
Mr Bradshaw said: “There’s no way through it for them.”
We need your consent to load this Social Media content. We use a number of different Social Media outlets to manage extra content that can set cookies on your device and collect data about your activity.
And he said: “We will continue to try and work with the Government to get to a resolution but something has to change.
“I have never seen the weight of support, the strength of feeling and anger that there is in this industry today.
“Many of them want to be militant.
“Now we are not encouraging that in any way shape or form, but Government need to understand that there is a real strength of feeling behind what this change means for the future of family farming in this country.”
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.”
But the National Farmers’ Union said that many family farms have a high notional asset value, but very low income and liquidity, which means that the vast majority of owners would be unable to meet the inheritance tax charges, without selling assets.