Carmichael calls for Chancellor to meet farming unions over inheritance tax changes

Orkney and Shetland MP, Alistair Carmichael, has spoken in Parliament to call for the Chancellor to meet with farming unions over the impact of changes to farming inheritance tax. Speaking during a debate on changes to Agricultural Property Relief (APR) on inheritance tax yesterday, Mr Carmichael highlighted new first from the Agriculture and Horticulture Development Board which suggest more farms will be affected by tax changes than predicted by the government, and reiterated farmers’ willingness to find compromises which raise revenue while protecting family farms.

Mr Carmichael is Chair of the House of Commons Environment, Food and Rural Affairs Select Committee.

Speaking in the debate, Mr Carmichael said:

“To my mind, it is almost certainly the case that a large number of other farms will be caught by the measure that have not been included in Treasury calculations.

“That view is reinforced today by the publication of the report by the Agriculture and Horticulture Development Board, which is a non-departmental public body of DEFRA. Its analysis is that 42,204 farms out of 54,938 of 50 hectares or more will be affected. That must surely give the Treasury some cause for concern, and a basis on which it could pause the change. 

“The underlying concern here is whether the Government still adhere to the belief that there is a public policy interest in ensuring the transition of family farms down the generations. If it remains the policy objective to this day, the figures need to be looked at more carefully. The thresholds could be increased or there could be a 10-year clawback—whatever the solution may be; the industry is full of ideas. 

“If the object was to avoid the super-rich using land to shelter their wealth, there are better ways of doing that. The Minister will get full co-operation from the farming unions and communities, but in order to have that, there has to be a dialogue. If he takes no other message back to the Treasury today, he should take this: the Chancellor must meet the farming unions.”

Later in the debate, Mr Carmichael intervened on the minister’s speech, saying:

“If people are looking at a £400,000 bill, which is what they would pay on a £3 million farm, and they earn £25,000 a year, they will still struggle to make that payment in 10 years; in fact, it would be downright impossible. That is how the land gets sold.”

In response, the Parliamentary Secretary for the Treasury Torsten Bell MP said:

“I will not comment on the individual example the right hon. Gentleman gave, but in general he is right to say that there can be large variations in the profits of farms between years and between farms. That is partly why the tax system already allows us—uniquely for farmers—to average profits over periods of time. Obviously, our advice to all farmers who think they will be affected by the change is that they should seek advice in turn.”