Tories and Labour clash on farm inheritance tax claims

The Conservatives have accused Labour of planning a £1bn inheritance tax raid on UK family farms, putting the UK’s food security at risk.

Defra secretary Steve Barclay has warned Labour is secretly planning to scrap inheritance tax relief for farmland to help fill the £38.5bn “black hole” it has from its unfunded spending commitments.

Farmers are currently protected from paying inheritance tax on their farms through agricultural property relief, which allows landowners to pass down farms to their children for free.

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The Conservatives warned that removing agricultural property relief would result in the average UK farm facing an inheritance tax bill of £600,000, potentially leading to the closure of many family farms and threatening the UK’s food security.

This figure is based on an average farm value of £2m.

The Conservative election manifesto includes a family business tax guarantee, pledging to retain inheritance tax reliefs for family farms to ensure they can be passed down without tax burdens.

Labour’s manifesto does not rule out scrapping inheritance tax relief for farmland. Equally, it does not say it will.

However, Labour has dismissed the Conservative claims as unfounded and part of a campaign of misinformation. They argue that these claims are “desperate nonsense”.

NFU leaders assured

Last December, shadow Defra secretary Steve Reed assured NFU leaders that Labour has no plans to change the inheritance tax rules for farmland, if it wins the general election.

Sir Keir Starmer’s party has insisted that nothing in its plans requires any additional tax to be increased beyond the measures it has set out in its manifesto on private schools, foreign property owners and non-domiciled residents.

Labour has also ruled out increases to income tax, national insurance and VAT, if it wins power.