Sir Keir Starmer has insisted the “vast majority of farmers” won’t be affected by adjustments to Inheritance Tax (IHT) forward of a protest outdoors parliament on Tuesday.
It follows Chancellor Rachel Reeves asserting a 20% inheritance tax that may apply to farms value greater than £1m from April 2026, the place they have been beforehand exempt.
However the prime minister appeared to quell fears as he resisted calls to vary course.
Talking from the G20 summit in Brazil, he mentioned: “If you take a typical case of a couple wanting to pass a family farm down to one of their children, which would be a very typical example, with all of the thresholds in place, that’s £3m before any inheritance tax is paid.”
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The feedback come as hundreds of farmers, together with movie star farmer Jeremy Clarkson, are as a consequence of descend on Whitehall on Tuesday to protest the change.
And 1,800 extra will participate in a “mass lobby” the place members of the Nationwide Farmers’ Union (NFU) will meet their MPs in parliament to induce them to ask Ms Reeves to rethink the coverage.
Chatting with broadcasters, Sir Keir insisted the federal government is supportive of farmers, pointing to a £5bn funding introduced for them within the price range.
He mentioned: “I’m confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget.
“They are going to be affected by the £5bn that we’re placing into farming. And I am very joyful to work with farmers on that.”
Sir Keir’s spokesman made an identical argument earlier on Monday, saying the federal government expects 73% of farms to not be affected by the change.
Surroundings, Farming and Rural Affairs Secretary Steve Reed mentioned solely about 500 out of the UK’s 209,000 farms could be affected, in line with Treasury calculations.
Nonetheless, that quantity has been questioned by a number of farming teams and the Conservatives.
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The NFU mentioned the actual quantity is about two-thirds, with its president Tom Bradshaw calling the federal government’s figures “misleading” and accusing it of not understanding the sector.
The Nation Land and Enterprise Affiliation (CLA) mentioned the coverage might have an effect on 70,000 farms.
Conservative shadow farming minister Robbie Moore accused the federal government final week of “regurgitating” figures that signify “past claimants of agricultural property relief, not combined with business property relief” as a result of he mentioned the Treasury doesn’t have that knowledge.
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Welsh farmers carried out a protest outdoors the Welsh Labour convention in Llandudno, North Wales, over the weekend
Agricultural property aid (APR) at the moment offers farmers 100% aid from paying inheritance tax on agricultural land or pasture used for rearing livestock or fish, and may embrace woodland and buildings, comparable to farmhouses, if they’re obligatory for that land to perform.
Farmers may declare enterprise property aid (BPR), offering 50% or 100% aid on belongings utilized by a buying and selling enterprise, which for farmers might embrace land, buildings, plant or equipment utilized by the enterprise, farm retailers and vacation cottages.
APR and BPR can typically apply to the identical asset, particularly farmed land, however APR ought to be the precedence, nonetheless BPR might be claimed as well as if APR doesn’t cowl the complete worth (e.g. if the land has improvement worth above its agricultural worth).
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APR and BPR can apply to farmland, which the Conservatives say has been missed by the Treasury in compiling its influence figures. File pic: iStock
Mr Moore mentioned the Division for the Surroundings, Farming and Rural Affairs (DEFRA) and the Treasury have disagreed on what number of farms will probably be impacted “by as much as 40%” because of the lack of information on farmers utilizing BPR.
Lib Dem MP Tim Farron mentioned final week1,400 farmers in Cumbria, the place he’s an MP, will probably be affected and won’t be able to afford to pay the tax as many are on lower than the minimal wage regardless of being asset wealthy.
