Inheritance Tax

Debate between Noah Law and John Cooper

Wednesday 14th October 2026 Commons Chamber

[John Cooper]

I thank my hon. Friend, who speaks to farmers far more than Labour Front-Bench Members ever do. Indeed, he knows that this is about fairness. We Conservatives believe in rewarding those who have done the right thing: those who have strived and who have saved.

There is further positive news from our plan, as highlighted by the TaxPayers’ Alliance. In October 2024, the previous Chancellor of the Exchequer announced an increase in the interest rate on the late payment of taxes. The rate had been calculated on the Bank of England base rate plus 2.5%, but the Budget saw an increase in the surcharge to 4% above base, so the interest rate on late payment of tax is currently a usurious 7.75%. Asset-heavy, cash-light taxpayers such as farmers are particularly vulnerable to that change as it takes time to convert assets into a form that allows them to pay that balance.

Inheritance tax is due six months after death, after which interest is charged daily on unpaid tax. However, executors may struggle to meet the deadline because properties are illiquid assets that can take considerable time to sell, particularly when probate is required. Selling properties quickly may mean accepting a lower price, while waiting for a better offer can result in additional punitive interest charges. The probate process creates further difficulties as executors often need probate to sell inherited properties, yet generally inheritance tax must be paid before probate is granted.

[Noah Law]

The hon. Member is making a set of technical and important points. Does he not accept that for businesses of the size and scale he is talking about, whether family owned or not, succession planning and perhaps even life insurance are important tools that should be considered to mitigate some of the things he is describing? [Interruption.] I do not think that is unreasonable.

[John Cooper]

I thank the hon. Gentleman for his intervention, but he is talking about adding yet more costs on to businesses. I have heard from farmers who tried inheritance planning but were told that the bank would not pass on the working overdraft to young members of the family. It is much more complicated than he pretends.

Although HMRC may allow payments in instalments over 10 years or grant credit in certain circumstances, interest can still accrue after six months. That leaves taxpayers with higher bills through no fault of their own. The Conservatives’ allowing family homes to be excluded from inheritance tax, plus the additional £1 million allowance, would restrict the effect of that pernicious interest.

Meanwhile, we need to see agriculture not as a dripping roast on which the Treasury may feast, but as a rural powerhouse helping to feed the nation. If this Government were serious about their mantra “food security is national security”, they would halt the family farm tax right now and stop turning the human drama of a death into a financial crisis for the living.