Agriculture: Inheritance Tax
The question
To ask the Chancellor of the Exchequer, what assessment has been made of the potential impact of proposed changes to Agricultural Property Relief on net carbon emissions.
Answered by James Murray
The government is extending the existing scope of agricultural property relief from 6 April 2025 to land managed under certain environmental agreements. The expectation is that some individuals will now choose to enter into agreements who would not otherwise have done so and this will have a positive environmental impact.
The government has also announced it will reform agricultural property relief and business property relief further from 6 April 2026 as it is not fair or sustainable for a very small number of claimants each year to claim such a significant amount of relief. In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Defra has a farm support budget of £2.4 billion for the next financial year and support for Environmental Land Management schemes will rise to the highest funding levels ever by 2025-26. Through this investment, the government is helping to secure a healthy and resilient future for English farming and restore our natural landscapes for generations to come whilst continuing to support farmers and landowners in their low-carbon, nature friendly practices.
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