Let me begin by saying I very much support the principles of parents being able to leave behind assets such as family farms, businesses, and homes to their children. The Leader of the Opposition, Kemi Badenoch, has made it crystal clear that she opposes the Government’s changes to Agricultural Property Relief and Business Property Relief and a future Conservative Government would reverse these changes.
According to reporting in The Times, up to 40 Labour MPs have urged the Chancellor to reverse her inheritance tax raid on farmers. Even the Government’s own backbenchers know that this policy will devastate our rural communities and put Britain’s food security at risk.
However, I also recognise the need for fair taxation to fund the public services we rely on. The Office for Budget Responsibility has forecast that inheritance tax will raise £8.3 billion in 2024/25. Inheritance tax is typically a 40 per cent rate on the value of the estate above the relevant thresholds. I am pleased that the previous Government introduced changes so that in most cases a couple can leave an estate of up to £1 million, including the family home, free of any inheritance tax.
At Autumn Budget the Chancellor made the decision to extend the freeze on inheritance tax thresholds at £325,000 for a further two years until 2030. In 2023/24 just over 5 per cent of estates were subject to inheritance tax but by 2030 this will nearly double to 9.5 per cent. The Chancellor also made the decision at Autumn Budget that from April 2027 private pensions will be subject to inheritance tax, which could leave some families paying 67 per cent tax on inherited pensions.
I will certainly raise the concerns you have set out with the relevant Ministers and will continue to pressure the Government on the callous measures taken against farmers and family-owned businesses at Autumn Budget.
