Inheritance Tax: Impact on Rural Businesses Debate
Full Debate: Read Full DebateBaroness Butler-Sloss
Main Page: Baroness Butler-Sloss (Crossbench - Life peer)Department Debates - View all Baroness Butler-Sloss's debates with the HM Treasury
(2 days, 5 hours ago)
Lords ChamberI am grateful to the right reverend Prelate for his question and I pay tribute to the work that he is doing with the communities that he is discussing. The Government believe that introducing a clawback mechanism such as he describes could still result in some of the wealthiest estates paying less inheritance tax than under the proposed reforms. That would raise considerably less money, and therefore would not go towards repairing the public finances and supporting the public services in the way that we seek.
My Lords, I own a farmhouse in Devon, which, like Northern Ireland, has very small farms. My house is worth over £1 million as a farmhouse, and all the farmhouses around me, with small farms of 100 or 150 acres, are worth at least £1 million. Does the Minister appreciate that? You are at the £1 million situation even before you look at the cost of the land.
I am grateful to the noble and learned Baroness for her question. As I say, individuals will benefit from 100% relief for the first £1 million of combined business and agricultural assets, but that £1 million sits on top of the existing reliefs and all other spousal exemptions and nil-rate bands. Full exemptions for transfers between spouses and civil partners will continue to apply; therefore a couple with agricultural or business assets can typically pass on up to £3 million-worth of assets without paying any inheritance tax at all. That is considerably more generous than in any other part of the tax system.