Inheritance Tax: Impact on Rural Businesses

Lord Bishop of St Albans Excerpts

Thursday 1st May 2025 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, there is no doubt that there is some sort of mismatch between the assurances being given and the experiences of some of our smaller farmers, who are deeply concerned at what is going on. What consideration have His Majesty’s Government given to having some sort of clawback clause? If assets were disposed of within, say, seven years after a death, that would deal with the problem of the tax loophole whereby some people are using land simply to get out of paying tax.

[Lord Livermore (Lab)]

I am grateful to the right reverend Prelate for his question and I pay tribute to the work that he is doing with the communities that he is discussing. The Government believe that introducing a clawback mechanism such as he describes could still result in some of the wealthiest estates paying less inheritance tax than under the proposed reforms. That would raise considerably less money, and therefore would not go towards repairing the public finances and supporting the public services in the way that we seek.