Agricultural Property Relief and Business Property Relief

Harriett Baldwin Excerpts

Monday 5th January 2026 Commons Chamber

[Dan Tomlinson]

They can each pass it on up to £2.5 million to whomever they choose to pass it on to. In the inheritance tax system more broadly, it is the case that the various bands and allowances are only fully transferable between spouses, and this is consistent with that policy. But it would be the case that if a farm was owned, say, by a brother and a sister, the brother could pass up to £2.5 million to whomever he wished and the sister could pass up to £2.5 million to whomever she wished. That is what example 2, which the hon. Gentleman is referring to, gets at.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

Worcestershire’s farmers have had to endure 14 months of sleepless nights over this policy before this partial U-turn. The Minister has hinted, at the Dispatch Box today, that he appreciates he will also have to U-turn on business property rates, because of the transitional relief coming off too quickly. Can he commit to the House that he will do that U-turn in less than 14 months?

[Dan Tomlinson]

We are having a discussion today about agricultural property relief and business property relief. I am sure we will have many occasions in the coming weeks and months to continue to discuss the changes that the Government have made on business rates to support businesses through the transition, because of course there has been a significant increase in their rateable values, coming out of the pandemic. I would just say to Opposition Members that the changes to the rateable values and the valuation methodology were signed off by Conservative Ministers. We have made sure that we are providing support, for example business rates will be capped at 15% for many pubs this year.

--- Later in debate ---

[Dan Tomlinson]

May I thank all hon. Members on both sides of the House for their engagement on this important issue today? We have set the threshold at £2.5 million for a single person and £5 million for a couple as a result of the changes announced at the Budget 2025. We think that threshold is right and fair. It means that the number of farming estates that will be affected will fall by half, and the vast majority will pay no additional inheritance tax at all.

[Dame Harriett Baldwin]

On a point of order, Madam Deputy Speaker. Earlier the Minister said that agricultural property relief was not available under Margaret Thatcher. In fact, it was Margaret Thatcher’s Government who brought it in under the Inheritance Tax Act 1984, and it was subsequently increased to 100% under John Major. How might I go about getting the Minister to correct the record?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

The hon. Lady, due to her experience, will know that the Chair is not responsible for the content of Members’ contributions, or those of Ministers—if only we were. She has no doubt got her point on the record, and we do not wish to continue the debate.