Agricultural Property Relief
Debate between Alistair Carmichael and Torsten Bell(4 weeks, 1 day ago)
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The Parliamentary Secretary to the Treasury (Torsten Bell)
indicated dissent.
Mr Carmichael
The Minister is shaking his head. I wonder whether the hon. Lady would join me in inviting him to intervene to explain why that fact is wrong.
Torsten Bell
The point I was making was about the hon. Member’s point that the relief had been scrapped; I was just making the point that the reliefs have certainly not been scrapped and that they remain very generous indeed.
Beyond the thresholds I mentioned, the 50% relief will continue and there will be a reduced marginal inheritance tax rate of 20%, rather than the standard 40%. Furthermore, in response to the points raised by several Members today about the cash-flow challenges that some farms face, particularly after bad years like last year, I will point out that heirs can spread the payments over 10 years interest-free, which is a benefit that is not seen anywhere else in the inheritance tax system.
Mr Carmichael
If people are looking at a £400,000 bill, which is what they would pay on a £3 million farm, and they earn £25,000 a year, they will still struggle to make that payment in 10 years; in fact, it would be downright impossible. That is how the land gets sold.
Torsten Bell
I will not comment on the individual example the right hon. Gentleman gave, but in general he is right to say that there can be large variations in the profits of farms between years and between farms. That is partly why the tax system already allows us—uniquely for farmers—to average profits over periods of time. Obviously, our advice to all farmers who think they will be affected by the change is that they should seek advice in turn.
I turn to the impact that these reforms will have, as that has been the central focus of most comments today.