Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the proposed changes to Agricultural Property Relief and Business Property Relief on levels of 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. 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. Where inheritance tax is due, those liable for a charge can pay any liability on the relevant assets over 10 annual instalments, interest-free.

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 Government will invest more than £2.7 billion a year in sustainable farming and nature recovery in England from 2026-27 until 2028-29. This will boost productivity and protect the natural ecosystems underpinning food production and broader economic activity, which will support food and economic security.