Agricultural and Business Property Reliefs: OBR Costing

Charlie Dewhirst Excerpts

Thursday 23rd January 2025 Commons Chamber

[James Murray]

The way to calculate the impact of changes to inheritance tax policy is to look at the inheritance tax claims that have been made, and that is what we have used as the basis for our calculations. In fact, the OBR publication yesterday confirms that it used HMRC’s data on inheritance tax reliefs in the past and inheritance tax projected forward, and it is on the basis of that data that we designed our policy.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

The Minister has just confirmed that the Treasury’s modelling is based on agricultural property relief and joint agricultural and business property relief claims, yet tax experts have said in evidence to the Environment, Food and Rural Affairs Committee that many family farms will wrap their agricultural land into a single business property relief claim, so the Treasury’s modelling does not take into account family farms that have used a BPR-only claim, tenant farmers who use BPR, and the many rural family businesses that will also use BPR. Will the Minister please take this opportunity to look at this again, before his Government wreck the countryside?

[James Murray]

As I set out earlier, the need to reform business property relief is as strong as the need to reform agricultural property relief, in order to have stable public finances and a fair and sustainable tax system. As I set out, 40% of APR goes to the top 7% of estates, and 50% of BPR goes to the top 4% of estates. Given the fiscal context that we inherited, that kind of unfairness is not sustainable. When balancing the books, we need to develop the tax system in a way that is sustainable and gives us the economic stability that we desperately need after the mess that the previous Government left us.