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The Treasury Minister is standing by his decision to introduce an inheritance tax on farms next year.
Treasury Secretary Dan Tomlinson said Government Last year’s Budget took the “right decision” to end the full tax relief given to farmers on transfer of agricultural property.
From April 2026, agricultural land owners will have to pay inheritance tax on their agricultural land at an effective rate of up to 20%, but can transfer agricultural and business assets worth up to £1 million without facing a bill.
mr tomlinson faced Labor The backbench called for the changes to be looked at as set out in the Center for Taxation Analysis (CenTax) report on the changes.
Centax proposed a “minimum share rule” so that landowners whose farms and businesses make up a small portion of their property – less than 60% – would see a higher tax rate.
The think tank found this could exempt land worth up to £5 million from paying inheritance tax.
david smithThe Labor MP for North Northumberland asked Mr Tomlinson: “I am proud to support a government that believes in progressive taxation, as I am sure he does, but the people with the broadest shoulders should bear the greatest burden.
“The SenTax minimum share rule proposal would mean that agricultural estates used for at least 60% farming would receive up to £5 million of relief per head. This would reduce the risk of family farms being broken up, placing a greater burden on very large estates and those gaming the system, and doubling forecast tax.
“So, will he instruct Treasury officials to take another look at the SenTax proposals on (farm property relief) before the Budget?”
The minister replied that he had read the report and said: “It is worth noting that the number of people who will lose out from the proposed policy will be more than double the number of people who will be affected by the changes being made by this Government, with over 1,000 properties affected by the proposals put forward by Centax.”
Maya Ellis said that the Treasury’s rationale for rejecting the Centax report “now appears to be the fear that more people will be subject to inheritance tax under its proposals, even though the majority of those extra people are private home owners with essentially agricultural fields”.
The Labor MP for Ribble Valley asked: “Does he not agree with me that Labor values call for supporting the hard-working farmers who are the backbone of this country, rather than the millionaire landlords who have money in their extensive estates to pay inheritance tax?”
Mr Tomlinson told the Commons: “On balance, the Government believes the policy position set out in last year’s Budget is the right decision and we will continue to do so.”
MPs also heard from James Wild, the Conservative shadow Treasury minister, that farmers were “shedding tears about the family farming tax, not because they are worried about losing their jobs, but because chancellor Putting generations of farming at risk”.
And Liberal Democrat rural affairs spokeswoman Sarah Dyke said the government “doesn’t understand” farmers.
“But there is still time to act and end months of confusion and suffering,” Ms Dyke said.
“So will the Chancellor and his ministers meet with the farmers of Glastonbury and Somerton and me to provide some clarity and reveal the full extent of the Government’s discussion on repealing this damaging family farming tax?”
Mr Tomlinson said in response: “Even though this tax is a difficult change – and I do not shy away from this fact – we believe it is the right change because it is a way of raising revenue in an appropriate way that helps contribute to restoring the public finances.”
chancellor Rachel Reeves Will present her next budget on 26 November.
Speaking in Downing Street on Tuesday, he said: “If we are to build Britain’s future together, we must all contribute to that effort.
“Each of us must contribute to the security of our country and the brightness of its future.”