Agriculture: Inheritance Tax
The question
To ask the Secretary of State for Scotland, if he will make an assessment with Cabinet colleagues of the potential impact of the changes made to inheritance tax at the Autumn Budget 2024 on the financial viability of small family farms in the north east of Scotland.
Answered by Ian Murray
This Government inherited a £22 billion in year black hole in the nation’s finances. The action we are taking in this Budget restores economic stability so we can invest in the future.
The government recognises that people want to pass on their assets to their families. However, the government is making the inheritance tax system fairer by ensuring that wealthy estates contribute more to the public finances.
The vast majority of agricultural estates currently pay no inheritance tax, and that will continue to be the case after the reforms announced at Budget. This means that any farm, following the death of the owner, can pass on a £1 million free of inheritance tax if they leave their residence to direct descendants.
The reforms announced for agricultural property relief are only expected to affect around 500 claims at death each year from 2026-27. Almost three-quarters of estates claiming the relief are expected to be unaffected.
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