Farmers and landowners are being urged not to make any kneejerk decisions amid the continued fallout from the Chancellor’s controversial changes to Inheritance Tax announced in the UK Budget.
As debate over the so-called “family farm tax” intensifies, including the mass farmers’ march on Westminster on Tuesday 19 November, lawyers in our Rural – Land & Business team are urging those potentially affected by the changes to carefully consider any alterations to their enterprises before acting. And, owing to the nature of the changes, it is important that any moves are considered as part of a full review of their personal legal and financial affairs.
The new threshold for Agricultural Property Relief and Business Property Relief announced by the Chancellor means that agricultural and business property assets worth more than £1m will be liable to Inheritance Tax at an effective rate of 20% from April 2026.
Leanne Gordon, Partner in our Rural – Land & Business team, who advises farmers and landowners across Scotland, comments:
“There’s understandable concern around the future of family farms. Amid the furore surrounding the announcement on Inheritance Tax, the temptation for those whose families may be affected by the change is to act fast.
“The decisions that need to be made will fundamentally affect families and businesses and therefore careful thought and consideration should be given before any actions are taken. It is important not to rush.”
“Every farming and land enterprise is unique, as is every family situation. There will not be a one-size-fits-all course of action to take. Every single decision needs to be taken around individual circumstances.
“That’s the message we have been sharing over the past couple of weeks.”
First Minister John Swinney highlighted his concerns about the UK Government’s planned changes to Inheritance Tax when he spoke at the AgriScot event in Edinburgh on Wednesday 13 November. At that same event, he faced calls from NFU Scotland to guarantee dedicated multi-year funding for agriculture in the Scottish Government Budget on Wednesday 4 December.
That comes on the back of the second major UK Budget change for Scottish agriculture - the removal of ring-fenced money for the industry, with that cash instead being part of the block grant given by Westminster to Holyrood.
Leanne continues: “Set against the backdrop of changes which are coming to support programmes for agriculture in any case - there is a huge amount for families and businesses in the rural sector to consider.
“It will take time and detail that we do not have yet in order to do that properly. On so many fronts, we need to be able to understand the practical impact of policies to help advise people about how to navigate the legal complexities surrounding them.
“We would advise against rushed reactions around selling land or transferring ownership without considering all the circumstances and consequences of any changes.”
Published in the Courier on 22 November 2024.
