Farming IHT Changes
We all want a tax policy that is fair, efficient, and rewarding. Today in Parliament I asked the Government to consider other options to the proposed IHT changes.
‘The CenTax minimum share rule proposal…would reduce the risk of family farms being broken up, place a greater burden on very large estates and those gaming the system, and double the forecast tax take. ‘
-David Smith
MP for North Northumberland
Farming Inheritance Tax: David asks Government to ‘take another look’
Today I gave my support to family farms in Parliament by asking the Government to ‘take another look’ at options for the proposed inheritance tax changes.
Like many of you I recently read an analysis of the IHT changes by the Centre for Analysis of Taxation (CenTax) which outlined some alternatives to the current approach. You can read the CenTax report at https://centax.org.uk/policy-brief-the-impact-of-changes-to-inheritance-tax-on-farm-estates/.
One of these alternatives – the ‘Minimum Share Rule’ – would protect family farms while increasing taxation on large, non-farming, estates. I support this proposal because I and the Government both believe in progressive taxation – that the largest shoulders should bear the greatest burdens.
I asked the Government: ‘Under the CenTax minimum share rule proposal, farm estates where at least 60% of the estate is used for farming would receive relief of up to £5 million per person. This would reduce the risk of family farms being broken up, place a greater burden on very large estates and those gaming the system, and double the forecast tax take. Will the Minister direct Treasury officials to take another look at the CenTax proposals on APR prior to the Budget?’
You can read my full question and the Minister’s reply here: https://hansard.parliament.uk/Commons/2025-11-04/debates/9776D2D0-0BAF-43D2-8C0E-D5474953EE0D/AgriculturalAndBusinessPropertyReliefImpactOnFarmers#contribution-10A861BA-B001-49DB-9484-7332D23A7CF4.
Earlier in the year I provided the Treasury with anonymous farm accounts from across North Northumberland to show the potential impact of the new measures.
And after dozens of conversations, visits, and meetings with farmers in North Northumberland, I was determined to raise the issue in Parliament again.
The Minimum Share Rule alternative would apply the 100% relief to £5m per person but only for estates that are at least 60% covered by APR/BPR.
Estates that do not claim 60% or more APR/BPR will pay more, as they are much less likely to be working farmers.
Back in February I asked the Government ‘to consider whether the balance is right’ on the proposed Inheritance Tax changes.
And I am also a founding member of the ‘Labour Rural Research Group’, a group of 33 rural Labour MPs who want to support rural communities and highlight the challenges of rural life. You can read about our work at https://labourruralresearchgroup.com/.
