Recent changes made to the Inheritance Tax policy by the government do not go far enough to support orchards, British Apples & Pears has warned.
The organisation said it welcomed any positive change on the Inheritance Tax position but that “the level of investment required for modern orchard businesses” meant the changes “really do not go far enough”.
On 23 December, the government announced the level of the Agricultural & Business Property Relief threshold would be increased from its initial proposal of £1m to £2.5m, when the policy comes into force in April 2026.
The u-turn means the policy will now allow spouses or civil partners to pass on up to £5m in qualifying agricultural or business assets between them before paying Inheritance Tax, on top of existing allowances.
The organisation said that this was “additional inequity” as it would mean single or divorced farmers would only “receive half the benefit of a married or widowed farmer”.
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“Whilst we understand that Inheritance Tax is a policy based on the individual, the impact for generational family businesses is significant,” said Ali Capper, executive chair of BAP.
She added that the changes to the Inheritance Tax had caused “untold damage to the investment in our sector”, compounded by extra costs brought about by replanning tax liabilities.
“To meet a government agenda that prioritises economic growth, it is important that businesses are incentivised rather than de-incentivised to invest,” said Capper.
“The government would do well to consider further changes to ensure that the policy is fair to all farming businesses and incentivises significant economic growth.”
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