Committee publishes correspondence on agriculture and inheritance tax
12 February 2025
The Welsh Affairs Committee has today published correspondence on the subject of inheritance tax for farm owners.
In the October 2024 Budget, the Chancellor set out plans to reduce the benefit of Agricultural Property Relief (APR) and Business Property Relief (BPR) from Inheritance Tax.
However, estimates of the number of farming taxpayers who could be impacted by this change have varied. In a letter to the Committee, Jeremy Moody of the Central Association of Agricultural Valuers suggests that more taxpayers than previously estimated could be affected.
Citing the Treasury’s estimate that 520 UK taxpayers could be affected in the first year of the change, Mr Moody assesses that Wales could meet 40% of this total alone. He writes that this “adds to the view that the official estimate of the number of those affected substantially underestimates that number”.
He suggests that this could be because the Treasury’s figures do not take account of farming claims made only under Business Property Relief, and that the change is expected to create new claims that would previously have been exempt.
In the letter, Mr Moody discusses possibilities for how many farms and similarly how many farming taxpayers could be within scope of the changes. He concludes that it is a “reasonable estimation” that as a result of the changes, 200 taxpayers a year in Wales will now pay tax on the value of their farming businesses.
Chair comment
Chair of the Committee Ruth Jones MP said:
“This is an important issue for the many taxpayers across Wales who rely on farming and the farming supply chain for their livelihoods. We must ensure that any changes to tax are proportionate and do not leave some out in the cold.
“However, the varying claims over data prove that this is a moving picture. We must take a broader view: how can we secure a sustainable future for Welsh farmers? I expect the Committee will take this information into account as we continue our scrutiny of the Government’s work on Welsh agriculture and consider how we can put farming on a firmer footing.”
Further information
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