Scotland’s first minister calls farm tax grab ‘unacceptable’

Scotland’s first minister, John Swinney, has attacked the recent decision by chancellor Rachel Reeves to restrict agricultural property relief (APR) on inheritance tax as  “unacceptable”, while future funding for Scottish farming is described as “inadequate”.

His comments to the AgriScot conference at the Royal Highland Centre Edinburgh on Tuesday (13 November) follows last month’s Budget decision to start charging IHT at 20% on farming assets worth more than £1m.

Farmers across the UK have said this may force the break-up of many family farm businesses at time of succession, in order to pay death duties that will way exceed the earning capacity of the land in question.

See also: Farmer demos and petitions against Budget measures

“The chancellor’s decision to reform exemptions to agricultural property relief for inheritance tax has led to unacceptable levels of stress, worry and uncertainty amongst farmers in Scotland,” said Mr Swinney.

“The UK Budget could scarcely have been more indifferent to the needs of rural communities and the rural economy – on top of a lack of certainty over long-term funding which we would have through membership of the EU, meaning we now have an inadequate settlement.”

Mr Swinney also condemned the lack of consultation on the matter by the Westminster government, and called for clarity on the future of financial support for the sector in Scotland.

Financial certainty

The need for financial certainty was pressed home by NFU Scotland (NFUS) president Martin Kennedy at the AgriScot event.

“The new UK government’s first Budget not only hammered hard-working family farms and crofts with crippling tax bills, but it also saw the UK government wash its hands of a commitment to multi-annual, ring-fenced funding for farming that has been in place for half a century,” he said.

While the Scottish government’s block grant is being increased by £1.5bn in the current financial year, followed by another £3.4bn in the next, how much is directed to the rural economy will be up to Holyrood.

“This is a record settlement from the UK government and must be reflected in a significant uplift in the Scottish agriculture budget,” said Mr Kennedy.

The union president urged farmers to join an NFUS lobby being organised for 28 November outside the Scottish parliament, ahead of Scottish budget announcements due on 4 December.