UK Budget: Labour urged on 'common sense' and to keep tax relief for Scotland farming community

There has been widespread opposition from the farming community to predicted changes to the current tax relief on agriculture property

The Labour government has been urged to show “some common sense” in Wednesday’s UK Budget by maintaining the tax break on inheritance of agriculture property.

Forecasted changes to the current Agricultural Property Relief (APR), a tax relief that allows some agricultural property to be passed on to the next generation without incurring Inheritance Tax (IHT), has been met with widespread opposition from the farming community.

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The rural affairs spokesperson for the Scottish Tories, Tim Eagle, who also farms, said if the APR was scrapped, it could be “devastating” for family farms across the country.

Tim Eagle, MSP, and rural affairs spokesperson for the Scottish Tories, has urged Keir Starmer's government to use 'some common sense' ahead of the budgetTim Eagle, MSP, and rural affairs spokesperson for the Scottish Tories, has urged Keir Starmer's government to use 'some common sense' ahead of the budget
Tim Eagle, MSP, and rural affairs spokesperson for the Scottish Tories, has urged Keir Starmer's government to use 'some common sense' ahead of the budget | Scottish Conservatives

Speaking ahead of the budget announcement on Wednesday, Mr Eagle said: “Labour must listen to our farmers, show some common sense, and rule out any changes in relation to inheritance tax in tomorrow’s budget.

“There is huge concern among the sector that the Chancellor is about to deliver a hammer blow to their future prospects. Given that their election manifesto featured less than 100 words on farming, any changes would confirm they are not interested in standing up for their interests.

“This relief support is absolutely crucial for our farmers and must be maintained by Labour going forward.”

Scottish Conservative MP for Gordon and Buchan and farmer Harriet Cross led a debate in Westminster last week on the issueScottish Conservative MP for Gordon and Buchan and farmer Harriet Cross led a debate in Westminster last week on the issue
Scottish Conservative MP for Gordon and Buchan and farmer Harriet Cross led a debate in Westminster last week on the issue | Scottish Conservatives

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His calls come after National Farmers Union Scotland (NFUS) said the Labour government were on record last year saying they had no plans to change inheritance tax.

The Tenant Farmers Association (TFA) also voiced opposition against the predicted change ahead.

On the assumption that Business Property Relief (BPR) will remain largely intact, trading owner occupiers of farmland will continue to be able to pass down their land through the generations after death without fear of inheritance tax.

However, TFA said landlords who cannot access BPR will find other tax havens for their assets, including taking land back in hand in an attempt to demonstrate that they are trading in order to switch from APR to BPR. TFA said this would effectively kill off the tenanted sector of agriculture coming from privately owned estate land.

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George Dunn, chief executive of TFA, said: “Rumours abound that the Chancellor may decide to abolish APR as part of the process of rebalancing the political scales by taking on the seemingly wealthy having been accused of raiding the wallets of pensioners with the previously announced changes to the winter fuel allowance.

“However, an ill-judged decision on APR could seriously damage the tenanted sector of agriculture, the most asset poor farming businesses in the country.”

Scottish MP for Gordon and Buchan Harriet Cross said: “It is not too late for the Chancellor to rule out any changes, rather than continuing to create this uncertainty for the sector.

“If any changes to agriculture property relief are introduced then it will show how disconnected Labour are from the reality facing our farmers on a daily basis, or how little they understand how these changes would be a hammer blow for them going forward.

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“We will see whether Labour are prepared to put agriculture and food security front and centre of their plans for government, or whether they will be ignored, just as they have experienced under 17 years of SNP rule in Scotland.”

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