Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of implementing a clawback mechanism into the proposed changes to APR and BPR.

The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and businesses, and fixing the public finances. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992.
A “clawback” would mean inheritance tax would only be due if the relevant assets are sold within a specified time period after a death. Introducing this mechanism, as some have suggested, could mean some of the wealthiest estates pay less inheritance tax compared to the proposed reforms. The Government disagrees with suggestions that a clawback would raise the same revenue as the reforms being introduced from 6 April 2026; it would raise much less, which would mean raising taxes elsewhere or lowering public spending. It would also add complexity to the tax system and continue to attract the very wealthiest to tax plan since beneficiaries could hold onto the assets over the specified clawback period just to escape the tax.