Labour challenged to publish assessment on ‘family farm tax’
© Adobe Stock Labour ministers have been challenged by opposition MPs to release a full impact assessment on its inheritance tax (IHT) reforms for UK farms.
The UK government estimates that around 500 farms per year will be affected by changes to agricultural property relief (APR) that are scheduled to take effect on April 6 2026. From this date, farms worth more than £1m will be subject to IHT at a rate of 20%.
But the NFU, Country Land and Business Association (CLA), Tenant Farmers Association and others all dispute the government’s figures and their calculations, with their own analysis showing it will have a much bigger impact on family farms.
See also: Treasury to look again at inheritance tax figures, NFU says
Analysis by the CLA has found that a typical 200-acre farm with expected annual profits of £27,300 faces an IHT liability of £435,000. Even if spread over 10 years, this would require them to allocate 159% of return on capital employed each year just to cover the bill.
During a lively rural affairs parliamentary debate on the impact of the Budget on farming communities on Thursday 14 November, shadow Defra farming minister Robbie Moore repeatedly pressed Labour ministers to release a full impact assessment of the IHT reforms.
Mr Moore accused farming minister Daniel Zeichner of “arrogance” on the IHT issue.
Detail
“He constantly keeps saying that we need to look at the detail, yet his department [Defra] and the Treasury disagree on how many farms will be impacted by as much as 40%,” said Mr Moore, Conservative MP for Keighley and Ilkley.
“In fact, as he knows, the figures being repeatedly regurgitated by the government consider only past claims for agricultural property relief, not those combined with business property relief, which is just as important.
“Why? Because the Treasury does not have the data. We need comprehensive detail on this policy to properly understand the impacts of his family farm tax.”
Mr Moore challenged Mr Zeichner to provide a clear “yes or no” answer on whether the government will release this assessment.
In response, Mr Zeichner did not respond directly to the question. Instead, he argued that the Conservatives should be reassuring farmers that fewer than 500 farms might be affected by the changes to APR.
SNP have form for budget raids – Carmichael
Alistair Carmichael, Liberal Democrat MP for Orkney and Shetland, has raised concerns in parliament about the government’s decision to remove the ringfence around agricultural funding for Scotland, Wales, and Northern Ireland.
He pointed out broad opposition from farming organisations and questioned why the ringfence, which protects farm funding, was being lifted when no one had asked for it.
Mr Carmichael also criticised the SNP’s record, highlighting how they previously raided agriculture funds to cover budget gaps. He warned that removing the ringfence could destabilise agricultural funding, leaving farmers vulnerable to future cuts, and argued they need consistent, secure support.
Mr Carmichael was appointed in September as chairman of the cross-party Environment, Food and Rural Affairs (Efra) committee, which scrutinises Defra and its associated public bodies.