Impact of agricultural property relief and business property relief on family farming in Northern Ireland

The last Budget announcements by the Chancellor of the Exchequer, Rachel Reeves MP, restricting the availability and thresholds for Agricultural Property Relief and Business Property Relief have produced a furious reaction among farmers.

The Chancellor’s stated policy objective was to prevent the use of land acquired by the wealthiest estates as a means of avoiding inheritance tax, but subsequent debate has focused on the number of estates that will be affected annually.

In Northern Ireland, the average value per acre of agricultural and business property is estimated to reach £21,000 by 2026. At that rate of valuation, 48.9% of NI farms would exceed £1 million in agricultural and business property value and could therefore potentially be impacted by the changes.

The structure of farmland ownership in Northern Ireland also suggests the likelihood of disproportionate impact when compared with the whole of the United Kingdom.

The Countryside Alliance has shared a briefing note with MPs ahead of a Westminster Hall debate on the impact of agricultural property relief and business property relief on family farming in Northern Ireland.

Read the full briefing note

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A report by the House of Commons Environment, Food and Rural Affairs Committee, which has a majority of Labour members, warned that the Treasury’s measures risk causing serious harm to family farms, rural livelihoods and food security. It called on the government to delay the changes pending a rethink.

The Countryside Alliance is greatly concerned that the changes will mean family farms being captured by inheritance tax, meeting those bills will necessitate sales of parts of landholdings, food security will be threatened as a result, and there will be particular impacts on the estates of farmers who die within seven years of any tax planning measures they take to mitigate the effects.

Closing a loophole to stop people avoiding tax is a legitimate aim, but the Chancellor has failed to meet her pledge to protect family farms in doing so.