Farming and Inheritance Tax

Debate between John Glen and James Murray

Wednesday 4th December 2024 Commons Chamber

[James Murray]

To address the right hon. Gentleman’s point, we recognise that agricultural and business property relief play an important role in supporting family farms, but the full unlimited exemption from inheritance tax has simply become unsustainable. The four most recent years-worth of data make clear why. The data shows that a very small number of agricultural property relief claimants, including those who claim business property relief too, benefited from a very significant amount of relief. In total, 47% of the Exchequer cost of the relief went to the top 7% of claims. To be clear what that means, I will put it another way. For every 14 or so estates, the top one among them claimed half the total relief.

[John Glen (Salisbury) (Con)]

Let me tell the Minister what concerns me most. There has not been an impact assessment, but if the major driver for the Government, whether we accept it or not, was to raise some money from this source, why were other more effective mechanisms not used, such as business roll-over relief, where a business could be sold in another context and rolled over into buying the land, deferring capital gains tax? If that mechanism had been used, the money would have been taken from much wealthier people who were not actually producing food in the first place. Now, we are capturing a massive proportion of small family farms completely unnecessarily, because due consideration of better alternatives was not done by the Minister.

[James Murray]

I reassure the right hon. Gentleman, for whom I have a lot of respect personally, that we carefully considered how to calibrate the policy to ensure that significant relief from inheritance tax is still available to family farms, while at the same time fixing the public finances in as fair a way as possible.

--- Later in debate ---

[James Murray]

I have confidence in the way in which we have calibrated the policy. As I said to the right hon. Member for Salisbury (John Glen), it has balanced the need to retain significant, generous provision of inheritance tax relief for family farms with ensuring that, at the same time, we fix the public finances in the fairest way possible.

[John Glen]

The hon. Gentleman is being very generous with his time. In view of the point that has just been made by my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson), will he not consider, at the very least, looking at some dispensation for farmers above a certain age, given the lack of time that they will have to plan for this intervention? The truth is that someone who is near retirement age will be faced with the prospect of 10 years of all their projected profits being eaten up by this tax, which will mean that the farm cannot go to the next generation. The hon. Gentleman must surely look at some mitigations to deal with that reality for so many farmers who are concentrated in that older age group.

[James Murray]

We know that individual circumstances will vary. Any individual who is concerned about their specific tax liability should obviously consult an accountant or financial adviser. We would not know, from a thumbnail sketch, whether that person had any inherited nil rate bands, what their liabilities were, what decisions they had made about gifting, and so on. A huge number of factors will play into this, and it is right for individuals to seek specific advice. Things that are said in this Chamber may be creating undue anxiety, when people should be looking into the detail.