Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of taxation policies on (a) farm investment and (b) succession planning on domestic food production.

The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and businesses, and fixing the public finances in a fair way. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992.

The reforms are expected to result in up to 520 estates claiming agricultural property relief, including those also claiming business property relief, paying more inheritance tax in 2026-27. Almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data.

The reforms to agricultural property relief and business property relief are forecast to raise a combined £520 million in 2029-30. The independent Office for Budget Responsibility certified this costing at Autumn Budget 2024 and it does not expect the reforms to have a significant macroeconomic impact. In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.