MPs call for year-long delay to farm inheritance tax

In a report released on Friday 16 May, the Environment, Food and Rural Affairs (EFRA) Committee has called for farm inheritance tax changes to be delayed by a year and consideration of alternative schemes that will not harm small family businesses.

The cross-party EFRA report suggests that a delay and / or rethink of the proposed IHT changes “would allow for better formulation of tax policy”, to protect vulnerable farmers who would have “more time to seek appropriate professional advice”.

Iwan Williams,  a partner in the Tax, Trusts & Succession team at national law firm Michelmores LLP comments: “This is an interesting development. With the changes to Agriculture Property Relief and Business Property Relief due to take effect from 6 April next year, there is already an extremely limited window within which to plan and implement a business succession strategy. This is causing huge consternation for business owners generally, many of whom feel that they are already having to navigate a perfect storm of economic and political headwinds.

“Despite strong and sustained lobbying from bodies such as the CLA and the NFU, the government have so far refused to back down, and it remains to be seen whether this new report will impact their thinking. Either way, this remains a period of significant change for farmers, rural businesses, and business owners generally, and the importance of taking professional advice now cannot be understated – the clock is ticking on what can be done to plan (or re-plan) for the future.”