Tenant farmers not considered properly in inheritance tax changes – Carmichael calls for pause

Orkney and Shetland MP, Alistair Carmichael, has today in Parliament challenged Treasury ministers on their consideration of Scottish tenant farmers in developing changes to farm inheritance tax. 

Speaking in a petition debate on the government’s changes to inheritance tax relief on working farms – which was signed by 355 people in Orkney and Shetland – Mr Carmichael noted the problem that such a tenancy “gives rise to a chargeable asset for taxation purposes, which survives death, but because they are tenants they do not have an asset that they can then sell on to settle their tax bill”. He reiterated calls for the Chancellor to meet with the leaders of the four national farming unions and to rethink the policy.

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

Speaking in the debate, Mr Carmichael said:

“Engagement has to come from the Chancellor of the Exchequer herself. For her not to have met yet with representatives of the farming unions of the four nations of this country is unacceptable and that has to change.

“I have one question that I would like to hear the minister to answer when he comes to reply: before this policy was made, what consideration was given in Treasury to the very particular position of tenants in Scotland who hold a tenancy under the 1991 Act? 

“Essentially the situation there is that a 1991 tenancy gives rise to a chargeable asset for taxation purposes, which survives death, but because they are tenants they do not have an asset that they can then sell on to settle their tax bill.

“That seems to me to be a position of fundamental inequity, and if the minister did not consider that before they brought forward the policies in the Budget, then what else was given insufficient consideration?

“There are good things for agriculture you could do [on inheritance tax reform], with proper consideration, but in order to do that the policy needs to be paused and the ‘proper engagement’ that we have spoken of needs to happen.”