Agricultural Property Relief and Business Property Relief
Debate between Alistair Carmichael and Dan Tomlinson(2 days, 5 hours ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
I welcome this announcement and I pay the warmest possible tribute to the farming unions and others whose tireless campaigning since the Budget of 2024 has made this happen. These changes make the policy better, but that is not the same as saying that they make it good. It is surely bizarre that in 2025, two farms could both be valued at £5 million but one of them would pass free of inheritance tax while the other had an inheritance tax bill of £500,000. Surely the Government now have to publish the impact assessment that they have presumably done so that we can all see the reasons for this change and have some confidence that they have got the figures right this time.
Dan Tomlinson
The figures that the Government have published on this change and at previous Budgets are drawn from actual claims and from engagement with His Majesty’s Revenue and Customs on both APR and BPR. That analysis shows that before this change, up to 275 estates a year would have been affected, and that that number is now forecast to halve to around 185. That means that around 85% of all estates claiming APR, some with BPR, will now not pay any additional tax. I stand by those figures. We published them when we made the decision and they are included in the letter that I and the Secretary of State have sent to all Members.
On the right hon. Member’s point about £2.5 million or £5 million, I think he was referring to the fact that a couple can pass on up to £5 million and for a single person it is £2.5 million. That is a long-standing position. It means that the inheritance tax nil rate band and the residence nil rate band are transferable only between spouses and civil partners. Making any unused allowance transferable in the same way is consistent with that long-standing approach.
Finance (No. 2) Bill
Debate between Alistair Carmichael and Dan TomlinsonTuesday 16th December 2025
(3 weeks, 1 day ago)
Commons ChamberRead Full debate Finance (No. 2) Bill 2024-26 View all Finance (No. 2) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts
Dan Tomlinson
I, too, welcome that change in the Budget, and I commend my colleague the Economic Secretary to the Treasury for the work she has been doing on that—I am sure we will hear more about it in her closing remarks.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Will the Exchequer Secretary give way?
Dan Tomlinson
I will give way, and then I will try to make some progress, so that other Members can get in.
Mr Carmichael
I am grateful to the Exchequer Secretary for giving way. On the point of growth, he should be aware that, since the Budget last year, 49% of farm businesses have paused or cancelled planned investment, 10% have already downsized operations, and 21% intend to do so before next April. What are the Government going to do to restore confidence in farming to invest? Without that, there is no growth in the rural community.
Dan Tomlinson
I thank the right hon. Member for his point. We do want to see farming businesses in rural communities and businesses up and down the country investing and growing for the future. On the changes to agricultural property relief and business property relief, it is worth noting that the statistics suggest that up to 375 estates a year will be affected—a small proportion of the overall number—and that number has come down from 520, as was forecast at the previous Budget.