Farmers have expressed consternation as the government made only marginal changes to the long-criticised Inheritance Tax bill.
In the budget this week, the Chancellor announced that the £1m threshold of the family farm tax would now be transferable between spouses to bring it in line with other Inheritance Tax policies.
This means that should a married farmer die they can leave £1m of assets to their spouse, who will then be able to use the deceased’s £1m in addition to their own when handing it down to their children on their death.
The NFU said the change would “help a handful of farmers but it is not enough to change the devastating impact for the majority”.
“Today the government accepted its changes to Inheritance Tax are flawed; which we welcome,” said NFU president Tom Bradshaw. “But this step does not do nearly enough to reduce the damage to the British farming community.
“The acute and cruel impact on the elderly remains. We keep fighting.”
The changes to Inheritance Tax on family farms are expected to come into force in April and would slash business property relief and agricultural property relief to 50% on businesses valued above £1m.
The policy prompted a collapse in support from the farming sector for the government when it was announced last year and led to protests and campaigns for change.
’Blood on her hands’
Despite the Met Police banning tractors from central London on Wednesday, farmers still protested at Parliament with one protester telling The Grocer that the Chancellor had “blood on her hands”.
The Suffolk cereals farmer, who did not want to be named, went on: “The industry has offered many alternatives, some of which increase the tax take and it’s a great shame that the Chancellor has not listened.
“It leaves us in a very difficult position,” he added.
This was echoed by Nicola Beer, a Devon dairy, beef and sheep farmer, who told The Grocer that it “makes what we do even harder because we have no security over the future”.
“All small farmers like ours are asset-rich and cash-poor,” she added. “All we want to do is provide high-quality food for the nation and we want to be able to do that without losing everything.”
Another dairy farmer, David Shepherd from Cheshire, said that the government was “killing good, viable business”.
He added that there would be knock-on effects on businesses, such as tractor suppliers, that would be affected if farmers don’t invest in their farms.
“This government playing student politics and they need to live in the real world,” he said. “This is affecting lives and livelihoods.”
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