Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
The Treasury has refused to entertain a compromise put ahead by farming teams to melt the affect of inheritance tax reforms on the agricultural sector, regardless of rising strain to rethink the coverage.
Farming leaders proposed a clawback mechanism that they mentioned would generate comparable revenues whereas defending household farms from the levy, throughout a long-awaited assembly between Treasury officers and the trade.
The teams — the Nationwide Farmers’ Union, the Tenant Farmers Affiliation and the Nation Land and Enterprise Affiliation — have criticised the choice by chancellor Rachel Reeves to finish a long time of exemption from dying duties for farmers in her October Finances.
However ministers advised the teams the federal government wouldn’t row again on its proposed reforms, which the trade warns might threaten the UK’s meals safety.
“The response from our members goes to be one among fury, one among actual anger, one among desperation that we’ve seen over current months,” mentioned NFU president Tom Bradshaw.
“We went to Treasury with an answer. We recognise the fiscal gap that the nation faces,” he added. “However for the time being, the door is shut from Treasury.”
The clawback — first steered by tax lawyer Dan Neidle of Tax Coverage Associates final yr — would see agricultural belongings solely entice the levy in the event that they have been offered inside an agreed time interval after inheritance.
This may higher goal rich people exploiting the tax reduction, the teams argued.
“We’ve introduced a compelling various however the authorities is deaf to the likelihood,” mentioned CLA president Victoria Vyvyan, including that she believed the federal government’s choice to dig its heels in confirmed that the coverage was “ideological”.
“I’ve actually not needed to suppose that that is ideology pushed, however the cash isn’t sufficiently big to justify the assault on our trade,” she mentioned.
One official briefed on Reeves’ pondering mentioned the chancellor was decided to press forward with the plan. “We’ve by no means steered there can be mitigations,” the official mentioned. “We strongly consider it is a truthful and balanced deal.” The Treasury didn’t instantly reply to a request for remark.
The reforms imply that from April 2026 agricultural landowners will probably be topic to a 20 per cent levy on land above a threshold of between £1.3mn and £3mn, relying on whether or not they’re married and in the event that they personal a house.
The choice has led to a major political backlash, and energised the farming group.
Final week Prime Minister Sir Keir Starmer was pressured to chop quick a go to to a housing improvement in Milton Keynes after a gaggle of farmers in tractors disrupted the looks. Throughout a tractor protest in London final week, Starmer insisted that “farming is high of the agenda”.
Opposition events have slammed the reforms, and overwhelmingly sided with farming teams on the difficulty.
Following the assembly, shadow atmosphere secretary Victoria Atkins mentioned Labour “clearly didn’t care about rural communities”.
She added: “Opposite to the phrases that come out of Keir Starmer’s mouth, that is but extra affirmation that farmers are on the backside of the listing of Labour’s priorities.”
Liberal Democrat atmosphere and rural affairs spokesperson Tim Farron mentioned the federal government was “throwing farmers to the wolves”.
He warned that the “household farm tax might be the ultimate nail within the coffin for a lot of communities struggling to manage”.
Among the authorities’s personal backbenchers have additionally known as for the reforms to be softened.
Throughout a petition debate on the adjustments final Monday, Labour MPs proposed tweaks similar to elevating the farm worth threshold, introducing an “lively farmer check” to ascertain if the land was getting used for agriculture, or making a claw again system.
