By Abi Kay
Hopes have been raised of a possible change to the inheritance tax plans set out at the last Budget, with the Treasury said to be considering alternative proposals.
Co-organiser of last year’s 10,000-strong Westminster farming rally, Herefordshire farmer Martin Williams, told Farmers Weekly there were conversations taking place across Whitehall on the matter ahead of this year’s Budget.
“There are more than just bits of rumours about potential changes to the threshold, which would inevitably mean the people we’ve been trying to get off the hook would get off the hook,” he said.
Officials are reported to be looking at the “minimum share rule” proposed by the Centre for the Analysis of Taxation (CenTax), which would give full relief from inheritance tax up to £5m per person (£10m for a married couple), where farmland or business assets form at least 60% of an estate.
From £5-10m per person there would be 50% relief, but after £10m no relief.
CenTax claims this proposal would double the revenue the government expected to raise from the current IHT changes, from £500m by 2029/30 to £1bn. Pushing the allowance for a single person from £5m – £10m would still raise as much as the original proposal.
This plan would, however, mean larger farms bearing a greater cost to take smaller ones out of scope.
“It all sits quite nicely as a way out,” said Williams. “The government can dress it up because they gain more money.”
Tom Bradshaw, president of the NFU, told FW he was also feeling optimistic about the prospect of movement on the policy.
“I’ve always felt there had to be some change, but I was pretty downbeat on my way up to Labour conference. I left feeling much more positive, though,” he said.
“We spoke with over 40 MPs there and I just got a real sense that they are they are galvanised behind trying to get some substantive change. My strong suspicion is that they are pushing the CenTax work.”
The Tenant Farmers Association (TFA) told Farmers Weekly they had also heard rumours of potential changes to the IHT policy plans.
Lynette Steel, TFA farm policy adviser, said: “After months of lobbying, we are really hopeful that the government is finally listening to the industry and we would welcome a change in the policy, especially as the industry juggles growing uncertainty as we approach 2026”.
Other lobbyists, including chief executive of the Nature Friendly Farming Network Martin Lines, have been feeding into discussions in Westminster.
“I’ve spoken to many rural MPs, including Labour members, who agree that improvements are needed,” he said.
“These MPs are willing to understand the details and numbers and they recognise how challenging these tax changes are. They want to find amendments and pathways to reduce the negative impact, especially on the older generation of farmers.”