Asked by: Lord Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government what is their estimate of the number of farmers, tenants, partnerships, or limited companies, who do not use agricultural property relief but rely on business property relief, and who will be impacted by the reduction of business 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.
The reforms are expected to affect around 2,000 estates in 2026-27. Around 500 of these are expected to claim agricultural property relief, including those also claiming business property relief. Around 1,500 are expected to claim business property relief. Around 1,000 of these are expected to only hold shares designated as “not listed” on the markets of recognised stock exchanges. This means around 500 estates are expected to claim business property relief on a range of other eligible business assets and pay more inheritance tax.
The reforms mean that around three-quarters of estates claiming business property relief in 2026-27 (excluding those only relating to holding shares designated as “not listed” on the markets of recognised stock exchanges) will not pay any more inheritance tax, nor will around three-quarters of estates claiming agricultural property relief, including where they also claim business property relief.
Asked by: Lord Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether they plan to make exemptions from the seven-year potentially exempt transaction rule in order to allow farmers and family business owners to gift their businesses without risk of payment of 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 Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the investment that will be lost within family-owned businesses now subject to inheritance tax as a result of changes to the reliefs announced in the Budget.
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 Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether they plan for machinery, buildings and energy infrastructure to be valued at market value or depreciated value for the purposes of business property relief for inheritance tax.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The approach to valuations for inheritance tax purposes is well-established. Valuations are based on the open market value of an asset, in line with the provisions of the Inheritance Tax Act 1984.
Asked by: Lord Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether they intend to value family businesses for inheritance tax based on the net asset value or their profitability.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The approach to valuations for inheritance tax purposes is well-established. Valuations are based on the open market value of an asset, in line with the provisions of the Inheritance Tax Act 1984.
Asked by: Lord Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether renewable energy infrastructure will be taxed as a business asset for inheritance tax purposes.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Any renewable energy infrastructure and equipment owned by a person liable to inheritance tax will be an asset of their estate for inheritance tax purposes. These assets can qualify for business property relief if (1) the assets are part of a business qualifying for business property relief and (2) if they are used in a qualifying business.
Asked by: Lord Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of losing agricultural property relief and business property relief for inheritance tax on the long-term ownership of land by private farmers and landowners, as opposed to UK and overseas-controlled corporate and institutional ownership.
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) 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.
Asked by: Lord Roborough (Conservative - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government whether they intend to replace investment in farm businesses lost as a result of the reduced agricultural and business property inheritance tax reliefs with an increase in the DEFRA capital budget.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
At Autumn Budget 2024, the Government took a number of decisions on tax, welfare, and spending to restore economic stability, fix the public finances, and support public services. These were tough decisions given the situation we inherited from the previous administration, but the Government has done so in a way that makes the tax system fairer and more sustainable. This includes the reforms to agricultural property relief and business property relief.
Despite the fiscal constraints, the Farming and Countryside Programme budget has been protected at £5 billion across the next two years. This includes the largest ever proportion of the budget directed at sustainable food production and nature’s recovery in our country’s history. This will accelerate the transition to a more resilient and sustainable farming sector, supporting investment in farm businesses and boosting Britain’s food security.