Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, pursuant to the Answer of 2 December 2024 to Question 15988 on Agriculture: Inheritance Tax, on what evidential basis his Department (a) determined that 73% of claims will be for less than £1 million and (b) used to identify the proportion of the remaining 27% of affected estates that are active family-run farms; and what information his Department holds on the proportion of agricultural land sales purchased by (i) large corporations and (ii) investment firms in (A) Scotland and (B) the UK in each of the last five years.

As referenced in the answer to PQ 15988, 73 per cent (1,264 of 1,730) of claims by estates for agricultural property relief in 2021-22 were for properties valued below £1 million. This is calculated using a table published by HM Treasury using HMRC data in Summary of reforms to agricultural property relief and business property relief, statistical annex (30 October 2024).

According to further analysis of HMRC claims data published by HM Treasury, in 2026/27 the reforms are expected to result in up to 520 of the estates claiming agricultural property relief, including those also claiming business property relief, paying more inheritance tax. This means almost three-quarters (1,260 of 1,780) of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data. See the Chancellor of the Exchequer’s letter to the Chair of the Treasury Select Committee, Dame Meg Hillier MP: committees.parliament.uk/publications/45691/documents/226235/default/.

Defra has not made an assessment of the proportion of farming businesses that are “family-run farms”. Defra does not hold information on the purchasers of agricultural land. The Government’s assessment relates to claims for agricultural property relief and business property relief. The qualifying conditions for these reliefs are set out in Part 5 of the Inheritance Tax Act 1984.