The Tenant Farmers Association has criticised Treasury Ministers for political stonewalling against any consideration of 'reasonable' amendments to the proposed changes to Agricultural and Business Property Inheritance Tax reliefs (APR and BPR) announced by the Chancellor Rachael Reeves last year.
Agricultural Property Relief
Since the Budget statement on October 30, the TFA said it has been in ‘ongoing and detailed discussions' with Treasury, HMRC and Defra officials including the Defra Secretary.
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But said it had only been allowed one ‘short' meeting with the Exchequer Secretary to the Treasury, with the Chancellor herself ‘no where to be seen'.
Just before the end of last year, the TFA said it received communication from the Treasury, which said they ‘have been listening' and appreciated TFA's ‘considered and constructive engagement' over the last period. But it said there was ‘nothing more' they could say on the issue at that point in time, and that it was for Ministers to decide whether they wish to 'amend the policy.'
In the past few days, TFA confirmed it has received an update from the Office of the Exchequer Secretary to the Treasury which said it understood ‘fully' the ‘very strong feelings' on the subject, including amongst TFA members.
Autumn Budget
It said, as Ministers have ‘set out consistently' since Autumn Budget 2024, the Government 'continues to believe this approach gets the balance right between supporting farms and fixing the public finances in a fair way.'
TFA chief executive George Dunn said the industry was now at the stage where everything that could be said has been said and Ministers now need to show the ‘necessary leadership' in taking the next steps.
Mr Dunn said: "With a technical consultation planned for this month in respect of the impact of the changes on Trusts, that would represent an ideal time for the Government to look at some of the issues raised by the industry without specific commitment at this stage. However, that needs a level of political willingness which is currently absent.
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'Stubborn refusal'
"Such stonewalling is not a good way to conduct government. Good Government is about understanding legitimate concerns and finessing policies accordingly. The stubborn refusal against making any changes will be a detriment to us all."
Technical consultation
The TFA has suggested a series of technical issues that should be included within the January consultation including understanding the right level of APR/BPR threshold; whether the APR/BPR threshold should be transferable between spouses and civil partners; changes to the taper on the IHT residence nil rate band on estates valued are more than £2 million; a provision allowing exempt transfers on shorter timeframe for older individuals and whether landlords letting secure tenancies of 10 years or more should have access to a higher zero rate band.
Mr Dunn said: "We understand that it is the Government's intention both to raise revenue and to stop cash rich individuals from acquiring assets to avoid tax. Alongside the proposals which the TFA has tabled, the Government should be looking to restrict the availability of Capital Gains Tax Business Assets Rollover Relief as the principal means to achieve its policy goals. However, that will need to await a further fiscal event."
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Tenant Farmers Association
He said the TFA has shown 'willingness to work within the bounds of what we understand Government policy to be.'
"The Government should show its strength by being willing to look at the reasonable adjustments we have proposed rather than displaying its weakness by using its Parliamentary majority to force its MPs through the voting lobbies on the back of a badly thought-out approach," Mr Dunn said.
Treasury
HM Treasury spokesperson said: "We recognise the strong feelings on this policy, and we have held meetings with leading stakeholders – including the Tenant Farmers Association – to discuss its impacts.
"Our commitment to farmers remains steadfast and our Plan for Change will protect food security and grow the rural economy. Around 500 estates are year will be affected by APR and BPR changes, and we remain committed to fully implementing the reforms."
