Source · Select Committees · Environment, Food and Rural Affairs Committee
Recommendation 13
13
Rejected
Delay final APR and BPR reforms until October 2026 for consultation and assessment
Recommendation
The Government should delay announcing its final APR and BPR reforms until October 2026, to come into effect in April 2027, to provide more time for farming businesses to conduct succession planning and seek appropriate professional advice. The Government should use this time to consult on its proposed changes, conduct an impact and affordability assessment, and consider policy measures and mitigations to reduce any unintended negative consequences. This consultation and assessment must consider the best means to: 33 a. Prevent APR and BPR being used to avoid inheritance tax while allowing farms to be passed between generations intact. b. Protect the most vulnerable, including those with less access to financial and legal advice those who will pass away within the next seven years. c. Prevent negative impacts on tenant farmers. d. Ensure food security is not threatened but enhanced. e. Ensure its policies reflect specific challenges or circumstances in the devolved administrations, given variations in farming structures, land prices, economic conditions and legal systems. The Government should also publish its evaluation of and rationale for following or not following alternative policy measures presented by stakeholders such as the Institute for Fiscal Studies and the National Farmers Union. (Recommendation, Paragraph 50) Communication and consultation
Government response summary AI-generated
The government rejects delaying APR and BPR reforms, confirming they will take effect from April 2026 as announced in Autumn Budget 2024, citing the need to repair public finances and stating that its consultation and approach are appropriate.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Rejected
HM Government · verbatim extract
Rejected
1992. Where inheritance tax is due, those liable for a charge can pay any liability on the relevant assets over 10 annual instalments, interest-free. The Government set out its position on consultation and engagement with stakeholders in the Exchequer Secretary to the Treasury’s letter to the Committee in February 2025. Ministers from multiple Government departments have had several meetings with agricultural organisations on this matter since Autumn Budget 2024, including the National Farmers’ Union, the Tenant Farmers’ Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers’ Union, NFU Cymru, NFU Scotland, and the Farmers’ Union of Wales. After listening, the Government believes the approach and timescale set out for these reforms is an appropriate one. The Government has explained the basis of its analysis since the outset, including the importance of focusing on claims data in relation to estates rather than the total value of farms. The Government set out its position in the Exchequer Secretary to the Treasury’s letter to the Committee in February 2025 and in earlier correspondence from the Chancellor of the Exchequer to the Treasury Select Committee in November 2024. The reforms are expected to result in up to around 520 estates across the UK claiming agricultural property relief, including those that also claim for business property relief, paying more inheritance tax in 2026–27. Almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026–27, based on the latest available data. The independent Office for Budget Responsibility (OBR) certified at Autumn Budget 2024 that the reforms to agricultural property relief and business property relief are forecast to raise a combined £520 million in 2029–30. The OBR does not expect the reforms to have a significant macroeconomic impact.
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