Farming News - DEFRA: Updated HMG statement on farming measures in the Budget
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DEFRA: Updated HMG statement on farming measures in the Budget
A government spokesperson said:
“The government’s commitment to our farmers remains steadfast. It’s why we have committed £5 billion to the farming budget over two years – more money than ever for sustainable food production.
“We understand concerns about changes to Agricultural Property Relief and the Defra Secretary of State and Exchequer Secretary to the Treasury met with NFU President Tom Bradshaw today.
“Ministers made clear that the vast majority of those claiming relief will not be affected by these changes. They will be able to pass the family farm down to their children just as previous generations have always done.
“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on. We remain committed to working with the NFU and listening to farmers.”
Background:
- Environment Secretary Steve Reed and Exchequer Secretary to the Treasury James Murray met with NFU President Tom Bradshaw today (Monday 4 November) to discuss the Budget. Ministers restated their commitment to continue to work with the NFU and listen to farmers.
- This follows Farming Minister Daniel Zeichner speaking to a number of different stakeholders including NFU last week, with a further meeting with NFU Deputy President David Exwood taking place today.
APR
- The vast majority of farmers will not be affected by these changes at all. They will be able to pass the family farm down to their children just as previous generations have always done.
- Individuals can pass up to £325,000 inheritance tax free, and £500,000 if includes a residence to a direct descendant, and £1m when a tax free allowance is passed to a surviving spouse or civil partner.
- There is also a full exemption of inheritance tax if passing assets to your spouse or civil partner.
- The reforms to agricultural property relief mean that farmers can access 100% relief for the first £1 million and 50% relief thereafter - meaning an effective 20% tax rate.
- This means an individual can pass up to £2m and a couple can pass up to £3m between them to a direct descendant inheritance tax free.
- The government has not abolished agricultural property relief, despite calls to do so, and continues to provide significant relief, with only around 500 estates each year claiming agricultural property relief each year expected to be affected.
- This means almost three-quarters of estates claiming agricultural property relief are unaffected because they have assets below £1 million.
- The relief will remain more generous than when they were last changed. For many years prior to March 1992, the rates of relief were 50% and 30%.
- Any inheritance tax liability can also be paid in 10 annual instalments in most circumstances.
- And if farmers pass on their farm more than 7 years before their death then no inheritance tax would be due either, with a reduced rate tapering down from 3 years after land has transferred ownership .
We have also announced in the Budget:
- £2.4 billion for farming budget next year – with the largest ever directed at sustainable food production and nature’s recovery in our country’s history. ELM schemes will remain at the centre of our offer for farmers and nature, with the Sustainable Farming Incentive, Countryside Stewardship Higher Tier and Landscape Recovery all continuing.
- £60 million through the Farming Recovery Fund to support farmers affected by unprecedented extreme wet weather last winter.
- £208 million to save the collapse of our defences against disease threats and protect the nation from outbreaks that can threaten our farming industry, food security and human health.
The government's New Deal for Farmers:
- Seeking a new veterinary agreement with the European Union to cut red tape at our borders and get British food exports moving again.
- Protecting farmers from being undercut by low welfare and low standards in trade deals.
Lowering energy bills by switching on GB Energy and introduce grid reform to allow farmers to plug in their renewable energy into the National Grid. - Introducing a land-use framework which balances long-term food security and nature recovery.
- Using the Government’s own purchasing power to back British produce so that 50% of food brought in hospitals, army bases and prisons is locally produced or certified to high environmental standards.
- Introducing first ever Cross-Government Rural Crime Strategy ever of its kind to crack down on antisocial behaviour, fly-tipping and GPS theft.
- Setting up a new British Infrastructure Council to steer private investment in rural areas including broadband rollout in our rural communities.