Government urged to review farming inheritance tax plans after Commons vote
Labor MPs have called on the government to reconsider plans to impose an inheritance tax on farmers, despite the House of Commons voting in support of the proposal.
Markus Campbell-Savours, the Labor MP for Penrith and Solway, has said he will vote against Chancellor Rachel Reeves’ tax changes and told the House of Commons he must do what he can for his community.
Backbenchers argued that most farmers were “not rich land barons” and that the measure failed to prevent “exploitation by celebrities and billionaires” who buy farmland to avoid paying the full inheritance tax bill.
But Treasury secretary James Murray insisted the changes to the Budget were “fair progress”.
MPs voted 327 to 182, with a majority of 145, to support the Government’s plans.
Speaking at the House of Commons Budget debate on Tuesday, Mr Campbell-Savours said: “There are deep concerns about proposed changes to agricultural property relief (APR).
“Members in Parliament have filed a lawsuit against these changes, which have resulted in many people, particularly older farmers, not yet making arrangements to transfer assets due to the impact on family farms.
“Many farmers feared this would happen. Some transferred in advance. Others contacted Labor candidates who reassured them, based on public commitments from the then Defra shadow secretary of state that APR would remain untouched.
“I was also a Labor candidate and will therefore be voting against the Budget resolution that made these changes possible.”
Mr. Campbell-Savours said he wanted to be able to move around his community “knowing that I did what I could for them” and that he couldn’t do that if he didn’t keep his word.
In the Budget the Chancellor announced that £1 million of unused APR and business property relief allowance could be transferred between spouses and civil partners.
But that hasn’t stopped criticism from the farming community, who have been fiercely opposed to the changes since they were proposed in last year’s budget, with the introduction of a 20 per cent rate for farmland and businesses worth more than £1 million.
South Derbyshire Labor MP Samantha Niblett welcomed the concessions for married couples in the budget but said: “I would ask the government to take another look at APR inheritance tax.
“Most farmers are not rich land barons; they scrape by with tiny, sometimes non-existent profit margins.
“Many were expressly advised not to pass their farms on to children, but now they face huge unexpected tax bills.
“We must accept a harsh truth: We have lost the trust of our farmers, and they deserve our greatest respect, integrity and unwavering support.”
South West Norfolk Labor MP Terry Jermy said Ms Reeves’ Budget failed to tackle the “exploitation of celebrities and billionaires” who buy farmland to avoid paying the full inheritance tax bill.
Labor MP Chris Hinchliff (North East Hertfordshire) asked Treasurer James Murray whether the Government would “take immediate action” if changes to agricultural property relief lead to farm closures.
Mr Murray replied: “The changes we have put forward to agricultural property relief are a fair way forward.
“They provide generous help to people while raising money for the public exchequer, and in this Budget the Chancellor announced that £1 million of unused funds for 100% agricultural property relief and commercial property relief can be transferred between spouses and civil partners.”
Mr Murray insisted the Chancellor had “made fair choices on tax that protect investment in our public services and make our economy safer”.
Ahead of the budget vote, the National Farming Union (NFU) called on Labor MPs to abstain from the vote and “show that they truly support rural workers”.
NFU chief executive Tom Bradshaw said: “Without change, the family farm tax will trap the most vulnerable members of our community, the elderly and the terminally ill with no ability to plan. This is inhumane and cruel.”
