Family Farming in Northern Ireland

Debate between Dan Tomlinson and Robbie Moore

Tuesday 28th October 2025 Westminster Hall

[Dan Tomlinson]

The hon. and learned Member raises the CenTax report, and it is worth noting some points about the analysis in that report. First, the Government have consistently said that around 520 farms would be paying additional inheritance tax as a result of the reforms announced at the Budget last year.

Members from all parties have been turning to the CenTax report as an independent analysis of the Government’s reforms. That report agrees with us on the number of farms that will be affected. That independent analysis conducted separately from the Government comes out with the same conclusion on the number of farms that will be affected and it says that its proposal—the minimum share proposal, which the hon. and learned Member for North Antrim mentions—would more than double the number of estates that would pay additional inheritance tax. I do not think the right way forward is to have the number of estates that would be affected increase from about 500 to, I think, about 1,200. I have looked at the report, which has been raised by Members from all parties, but I do not think it is the silver bullet that others have concluded it could be.

The context I just set out is why we are changing how we target agricultural property relief and business property relief from April next year. We are doing so in a way that maintains a significant relief for estates, including smaller farms and businesses. Individuals will still get 100% relief for the first £1 million of combined business and agricultural assets. I know that Members know this, but it is worth setting out the position again. On top of that amount, there will be a 50% relief. That means that inheritance tax will be paid at a rate of up to 20% rather than the standard 40%.

[Robbie Moore]

A £1 million threshold is nothing when we take into account the value of farmland, a cottage, a farmhouse, growing crops, stocks in store, livestock and machinery valuations—all of which will be taken into account at the valuation of an estate on death. A £1 million threshold is nothing before a 20% IHT liability is put on that estate. I urge the Minister to look at this again. Farmland values are significantly higher in Northern Ireland, and I reiterate my point that Northern Ireland farmers will see a greater impact from the £1 million threshold.

[Dan Tomlinson]

I do not agree that £1 million is nothing. It is a significant increase and a significantly higher threshold than that for anyone who does not have access to APR or BPR. I understand the point about land values in Northern Ireland, but at the same time, as far as I am aware, farms in Northern Ireland are smaller than those elsewhere. It is also worth bearing in mind that the £1 million relief comes on top of the spousal exemptions and nil-rate bands, so, depending on individual circumstance, up to £3 million can be passed on by two people, free of inheritance tax, and, as has been mentioned, the payment can be spread over 10 years, interest free. That policy design is not seen anywhere else in the inheritance tax system.