Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the analysis by the National Farmers’ Union that figures from the Department for Environment, Farming and Rural Affairs indicate that 66 per cent of farms will be affected by the proposed changes to agricultural property relief; and what is the reason for the difference between this figure and the Treasury’s calculation that 28 per cent of farms will be affected.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
It is expected that up to up to 520 estates claiming agricultural property relief will be affected by these reforms. Almost three-quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) each year are expected to be unaffected by these reforms.
HMRC and Defra data describe different things. The Defra data shows the asset value of farms in England. However, it is not possible to accurately infer a future inheritance tax liability from data on farm asset values. HMRC data relates to estates making claims for agricultural property relief.
Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what consideration they have given to tapering or staggering the reduction of agricultural property relief for inheritance tax to give farmers time to put their tax affairs in order.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
It is expected that up to up to 520 estates claiming agricultural property relief will be affected by these reforms. Almost three-quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) each year are expected to be unaffected by these reforms.
In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government whether they plan to review their analysis, including assumptions, which informed their decision to reduce agricultural property relief for inheritance tax.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
It is expected that up to up to 520 estates claiming agricultural property relief will be affected by these reforms. Almost three-quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) each year are expected to be unaffected by these reforms.
In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact that the change to agricultural property relief will have on (1) investment in new technology for existing farming businesses, (2) food supply to the market should existing farmers leave the sector, and (3) encouraging new entrants and young farmers to start farming.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
Additionally, the Chancellor wrote to the Treasury Select Committee on 15 November 2024, setting out further detail regarding the distribution of claims at death for agricultural property relief. This letter has been published at https://committees.parliament.uk/publications/45691/documents/226235/default/.
It is expected that up to up to 520 estates claiming agricultural property relief will be affected by these reforms. Almost three quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) are expected to be unaffected.
In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Through the Farming Innovation Programme the Government has committed over £127 million towards research and development funding to farmers, growers and foresters who want to develop and use new, innovative methods and technologies. The Government is also supporting farmers in adopting new productivity improving technologies directly on their farms through the Farming Investment Fund. Since 2021, Defra has paid over £99 million in grant funding to farmers to buy and install modern equipment.
Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government whether they intend to publish the evidence used to inform their decision to change agricultural property relief, and their reasoning.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
Additionally, the Chancellor wrote to the Treasury Select Committee on 15 November 2024, setting out further detail regarding the distribution of claims at death for agricultural property relief. This letter has been published at https://committees.parliament.uk/publications/45691/documents/226235/default/.
It is expected that up to up to 520 estates claiming agricultural property relief will be affected by these reforms. Almost three quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) are expected to be unaffected.
In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Through the Farming Innovation Programme the Government has committed over £127 million towards research and development funding to farmers, growers and foresters who want to develop and use new, innovative methods and technologies. The Government is also supporting farmers in adopting new productivity improving technologies directly on their farms through the Farming Investment Fund. Since 2021, Defra has paid over £99 million in grant funding to farmers to buy and install modern equipment.
Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what consultation they undertook with the farming sector prior to the proposal to change agricultural property relief.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
Additionally, the Chancellor wrote to the Treasury Select Committee on 15 November 2024, setting out further detail regarding the distribution of claims at death for agricultural property relief. This letter has been published at https://committees.parliament.uk/publications/45691/documents/226235/default/.
It is expected that up to up to 520 estates claiming agricultural property relief will be affected by these reforms. Almost three quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) are expected to be unaffected.
In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Through the Farming Innovation Programme the Government has committed over £127 million towards research and development funding to farmers, growers and foresters who want to develop and use new, innovative methods and technologies. The Government is also supporting farmers in adopting new productivity improving technologies directly on their farms through the Farming Investment Fund. Since 2021, Defra has paid over £99 million in grant funding to farmers to buy and install modern equipment.
Asked by: Lord Bishop of Chelmsford (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of taxing imported fertilizer but not imported food on ensuring that British farming remains globally competitive.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Overall, the Government does not expect the introduction of the UK Carbon Border Adjustment Mechanism (CBAM) on fertiliser to have a significant impact on UK farmers.
The UK’s core tariff schedule, known as the UK Global Tariff (UKGT), sets out the tariff rates that apply to all imported goods balancing the interests of UK consumers, producers, productivity, competitiveness and external trade. A large proportion of agri-food and fertiliser imports enter the UK tariff free. This is either because the tariff applied on the specific product under the UK Global Tariff schedule is zero or because the product is eligible for a zero-duty preferential tariff when imported from countries with which the UK has signed a bilateral trade deal.
Additionally, the UK operates an Emissions Trading Scheme (ETS). This is the UK’s principal carbon pricing mechanism and covers the manufacturing of fertiliser. In recent years, UK-based fertiliser manufacturers have received more free allowances than they needed to surrender to cover their emissions.
The UK CBAM rate charged on imports, including fertiliser, will reflect the carbon price paid by domestic industries after support mechanisms (such as free allowances) have been taken into account. As a result, we expect initial liabilities arising from the UK CBAM to be relatively low whilst encouraging the supply and use of fertiliser with lower levels of embodied carbon than would otherwise have been the case.
More generally, about 70% of UK agri-food imports come from the EU. The EU also have an Emissions Trading Scheme and will introduce a CBAM from January 2026; both of which include fertiliser. This means that fertiliser used by EU farmers will also have been subject to a carbon price. At the same time, many non-EU food imports cannot be produced in the UK.