Inheritance Tax: Impact on Rural Businesses

Lord Foulkes of Cumnock Excerpts

Thursday 1st May 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble and learned Baroness for her question. As I say, individuals will benefit from 100% relief for the first £1 million of combined business and agricultural assets, but that £1 million sits on top of the existing reliefs and all other spousal exemptions and nil-rate bands. Full exemptions for transfers between spouses and civil partners will continue to apply; therefore a couple with agricultural or business assets can typically pass on up to £3 million-worth of assets without paying any inheritance tax at all. That is considerably more generous than in any other part of the tax system.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, did my noble friend notice that, when the farmers blocked Whitehall with their tractors—sparkling, new, expensive tractors—they did not look very poor? Has he noticed that, when the Tories talk about tax, they always want to make the rich even richer?

[Noble Lords]

Oh!

[Lord Foulkes of Cumnock (Lab Co-op)]

They do. Will my noble friend confirm that, when poor people get tax deductions, they spend money on food and other essentials, and that helps growth?

[Lord Livermore (Lab)]

It is incredibly important that the decisions we take make the tax system fairer and more sustainable, and I believe that is absolutely what we are doing. Despite a very tough fiscal context, we are maintaining considerably more generous reliefs in this sector than exist anywhere else in the tax system.