The Welsh Affairs Committee has today published
correspondence on the subject of inheritance tax for farm
owners.
In the October 2024 Budget, the Chancellor set out plans to
reduce the benefit of Agricultural Property Relief (APR) and
Business Property Relief (BPR) from Inheritance Tax.
However, estimates of the number of farming taxpayers who could
be impacted by this change have varied. In a letter to the
Committee, Jeremy Moody of the Central Association of
Agricultural Valuers suggests that more taxpayers than previously
estimated could be affected.
Citing the Treasury's estimate that 520 UK taxpayers could be
affected in the first year of the change, Mr Moody assesses that
Wales could meet 40% of this total alone. He writes that this
“adds to the view that the official estimate of the number of
those affected substantially underestimates that number”.
He suggests that this could be because the Treasury's figures do
not take account of farming claims made only under Business
Property Relief, and that the change is expected to create new
claims that would previously have been exempt.
In the letter, Mr Moody discusses possibilities for how many
farms and similarly how many farming taxpayers could be within
scope of the changes. He concludes that it is a “reasonable
estimation” that as a result of the changes, 200 taxpayers a year
in Wales will now pay tax on the value of their farming
businesses.
Chair of the Committee MP said:
“This is an important issue for the many taxpayers across Wales
who rely on farming and the farming supply chain for their
livelihoods. We must ensure that any changes to tax are
proportionate and do not leave some out in the cold.
“However, the varying claims over data prove that this is a
moving picture. We must take a broader view: how can we secure a
sustainable future for Welsh farmers? I expect the Committee will
take this information into account as we continue our scrutiny of
the Government's work on Welsh agriculture and consider how we
can put farming on a firmer footing.”
