House of Commons · Westminster Hall
14 January 2025 · 13 other contributors · 5,066 words
Opened by Graham Stuart Con Beverley and Holderness
Responding minister: James Murray
Summarised by AI from the official record, so it can contain mistakes.
Graham Stuart raised concerns about agricultural and business property relief in Westminster Hall. A government minister responded.
Key points
Key requests to Government
The right hon. Gentleman asks the Government to reconsider these changes before they take effect in April 2026, urging a threshold increase between £4 million and £5 million to protect family farms from being wiped out by inheritance tax.
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
The Chancellor's autumn Budget announced a significant change to Agricultural Property Relief (APR) and Business Property Relief (BPR), imposing a 20% tax on the value of land and machinery exceeding £1 million. This could result in one farm closure per rural constituency every year, according to government estimates. The impact is particularly severe for small family farms, which may lose their livelihoods and local knowledge critical for maintaining watercourses.
He agreed that discouraging investment in family farms would harm growth and productivity.
The SNP MP highlighted the competitive pricing of UK fresh produce, expressing concern about government policy deterring necessary investments by farmers.
She expressed concerns about the decision-making of poultry farmers to not invest in new buildings due to potential APR bills, impacting profitability and business growth. Questioned the Secretary of State's argument for diversification given that diversified assets would be taxed under BPR and APR reforms.
Noted that the measure has an inequitable application across different regions, particularly in Northern Ireland where land values are higher.
Highlighted the need for a higher threshold to protect family farms and mentioned discussions with the National Farmers Union regarding legal opinion against the measures.
He supported a pause in the current policy to look at its impact alongside other policy decisions and address concerns regarding farmer uncertainty.
Stressed that these changes threaten to push family-run farms into the hands of large corporations, eroding rural communities and jeopardising domestic food security.
Discussed a case involving a 70-year-old farmer whose plans for passing on his farm to the next generation may be disrupted by the seven-year rule.
The MP requested to ask a question but was not given way by Graham Stuart. Asked the Minister a question but did not receive an immediate answer due to time constraints.
Suggested a higher threshold for inheritance tax on farms with a clawback mechanism to avoid affecting small family farms.
The SNP MP questioned the Government's figures on estates claiming APR, suggesting that more evidence was needed for such a high impact policy change.
Concerned about the potential loss of local knowledge regarding watercourses, as smaller farms are replaced with development.
The MP questioned if her colleague from Penrith and Solway was scolded for speaking out against the APR and BPR changes during a debate, highlighting the impact of these changes on family-owned businesses.
Government Response
James MurrayThe Exchequer Secretary to the Treasury
The Minister congratulated the right hon. Member for Beverley and Holderness on securing the debate, acknowledging his thoughtful contributions. However, no further policy commitments or detailed responses were provided in this excerpt. Explained the Government’s decision to reform agricultural property relief and business property relief, highlighting that despite tough fiscal context, significant tax reliefs will be maintained. Emphasized that individuals will still benefit from 100% relief on the first £1 million of combined business and agricultural assets, with an additional 50% relief, maintaining a reduced effective rate up to 20%. Stressed the importance of spousal exemptions and nil-rate bands, allowing couples to pass up to £3 million tax-free. Cited data indicating that while 520 estates will be affected by reforms, only about one quarter would pay more tax initially; three quarters will not see an increase in tax due to these changes introduced this year. Noted the total cost of £1.1 billion to the Exchequer and stated no significant macroeconomic impacts are expected.