Agricultural Property Relief and Business Property Relief Debate
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John Whittingdale
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Agricultural Property Relief and Business Property Relief
John Whittingdale Excerpts(3 days, 20 hours ago)
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Dan Tomlinson
I wish my hon. Friend’s constituents a happy new year. The Batters review, which was published just a few weeks ago, set out ideas that the Government can take forward to ensure that farming can be profitable and sustainable. I know that Ministers in the Department for Environment, Food and Rural Affairs and across Government will continue to work on those important objectives.
Sir John Whittingdale (Maldon) (Con)
Although I welcome this announcement, which directly contradicts what the Secretary of State told me and my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins) on the day that the House rose for Christmas, is the Minister aware that a significant number of my constituents who farm in the Dengie peninsula and elsewhere will still face a significant inheritance tax bill that may prevent them from passing on their farm, as they inherited it, to their children? If the Minister is anxious about the scheme being used for tax avoidance, will he reconsider the NFU’s suggestion that there be a clawback mechanism, which would allow the Government to take back the exemption if a farm was sold within a certain period after inheritance?
Dan Tomlinson
No, we will not be considering the clawback proposals put forward. Instead, the Government have come forward with the change that was announced in December, which increases the threshold from £1 million to £2.5 million. It is worth remembering that the tax rate paid above the higher threshold is half the rate that anyone else who has sufficient assets would pay if they were liable for inheritance tax, and that any tax liability can be paid interest-free over 10 years. On balance, while these changes will affect some of the very largest estates—the Government have published the numbers, which are based on the actual claims data from His Majesty’s Revenue and Customs; it estimates that fewer than 200 estates will pay additional tax—almost all the estates paying additional tax will pay significantly less than they would otherwise have done, because we have listened to family businesses and farming communities.