Budget 2024: Could Agricultural Property Relief be scrapped?
22nd October 2024
Farmers and growers are increasingly concerned by reports that the Treasury is considering major changes to Agricultural Property Relief (APR) as part of the forthcoming budget, something that would have a serious impact on many family farms.
APR allows working farms to be passed from the principal farmer upon their death to the next farming generation by making such businesses free from inheritance tax so long as they are working farming businesses.
Significant changes to, or the abolition of, APR could have a disproportionate effect on small family farms, which are the backbone of British agriculture.
Farming families at risk
NFU analysis of APR suggests that scrapping it would only save the Treasury £120 million a year, while the negative impact on farming would be much larger.
The union recently wrote to Chancellor Rachel Reeves about the vital need to protect family farms and tenants through APR. NFU president Tom Bradshaw also made the case to the Chancellor at the Labour Party Conference in Liverpool this year.
Mr Bradshaw said: “NFU members keep seeing these alarming media reports, and they are understandably worried and upset. Major APR changes would put at risk many farming families’ succession plans and consequently undermine the government’s own ambitions for food and environmental security.
“I’m also very concerned that changes would damage the tenanted sector, as landowners will have much less incentive to let land to agricultural tenants. In short, this Family Farm Tax, which is what removing APR amounts to, could be too much for some farming businesses which are already struggling with numerous challenges.”
Mr Bradshaw added that farming is often a generational business, and APR is what makes it possible for small family farms to pass from one generation to another.
“We’ve given the Treasury the details and evidence for our concerns, and we stand ready to meet ministers and officials again, at any time, to reinforce the point that a Family Farm Tax could push many small family farming businesses over the edge,” he concluded.
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