Rural Affairs
Debate between Ben Obese-Jecty and Steve Reed(1 week, 3 days ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Steve Reed
If the hon. Lady will forgive me, I want to make a little progress.
The new deal for farmers includes seeking a new veterinary agreement with the EU to tear down the export barriers that the previous Government erected in the first place; backing British produce by using the Government’s purchasing power to buy British; and protecting our farmers from ever again being undercut by low welfare and low standards in trade deals like the disastrous one the previous Government signed with Australia and New Zealand.
The House is aware that the Government inherited a catastrophic £22 billion black hole in the nation’s finances, meaning we have had to take tough decisions on tax, welfare and spending to protect the payslips of working people. This has required reforms to agricultural property relief. I recognise that many farmers are feeling anxious about the changes; I urge them not to believe every alarming claim or headline and I reassure them that the Government are listening to them. We are committed to ensuring the future of family farms. The vast majority of farmers will not be affected at all by the changes. Let us look at the detail.
Steve Reed
If the hon. Gentleman will give me a little time, it is important that I make these points.
Currently, 73% of agricultural property relief claims are less than £1 million. An individual farm owner can pass on up to £1.5 million and a couple can pass on up to £3 million between them to a direct descendant, free of inheritance tax. If a couple who own a farm want to pass it on to a younger relative and one partner predeceases the other, each of them has a £1 million APR threshold that they can pass on. Add those together and that is £2 million, plus the £1 million that a couple with a property can pass on to their children. For most people, that is an effective threshold of up to £3 million to pass on without incurring inheritance tax. Any liability beyond that will be charged at only half the standard inheritance tax rate and payment can be phased over 10 years to make it more affordable. Farmers will be able to pass down their family farm to future generations, just as they always have done.