NFU Scotland has reaffirmed its unwavering opposition to the UK Government’s damaging Inheritance Tax (IHT) reforms and issued a renewed call for MPs to support urgent changes to the Finance Bill, especially the removal of a clause described as “cruel and unworkable”.
Alongside this, NFU Scotland continues to press for wider changes to the proposals, including a significant increase to the proposed £1 million cap on Agricultural Property Relief (APR) and Business Property Relief (BPR), in line with independent advice from CenTax.
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With less than four months until the cap is due to take effect, the Union warns that many family farms remain exposed to crippling tax bills that could threaten the future of long-established businesses. Despite sustained lobbying from across the farming sector, the UK Government has so far refused to revise its approach.
The anti-forestalling clause, as currently drafted, would mean that any farmer transferring assets before April 2026 could face both Capital Gains Tax and Inheritance Tax if they die within seven years, a move NFU Scotland argues will punish those seeking to carry out responsible succession planning.
NFU Scotland President Andrew Connon, who has made multiple visits to Westminster to lobby MPs, said:
“This clause is a moral and political failure. Elderly and terminally ill farmers are reporting that they are in an appalling situation, where they are financially better off dying before April 2026 than transferring the farm to the next generation. No tax policy should ever punish people for doing the right thing.”
He added: “We’ve had a minor tweak made to spousal transfer in the recent budget, but for most farming families, this is still a ticking time bomb. We won’t stop fighting until this clause is scrapped and fair, workable reforms are delivered.”
NFU Scotland is working closely with farming unions across the UK to garner support for changes and to continue sharing case studies that reveal the scale of the problem with MPs across Scotland.
In one example, a typical mixed dairy, sheep and arable family farm shows just how devastating the reforms would be:
- Under the current rules, the elderly father would face an IHT bill of £20,000 when passing the farm to his son.
- But under the UK Government’s proposed £1 million cap on agricultural and business reliefs, the IHT bill jumps to £775,000.
- That level of liability is unpayable. The farm’s average five year profit is £40,000 split three ways, nowhere close to the £70,000 per year the family would need just to service repayments.
NFU Scotland argues that these real-world examples, combined with independent expert analysis, show that the Government’s figures vastly underestimate the true impact of the changes. While HMRC suggests only a few hundred farms will be affected, CenTax estimates up to 75,000 UK farm businesses are exposed.
NFU Scotland is urging:
- All Scottish MPs to support amendments that remove the anti-forestalling clause.
- The UK Government to rebuild trust with farming families by delivering on its promise to protect APR/BPR.
- Farmers and crofters to continue speaking out, contacting MPs, and sharing their stories.
Andrew Connon concluded:
“This is not about tax avoidance, it’s about protecting the future of real working farms. The changes coming in April are a gift to non-farming investors and a blow to the backbone of rural Scotland. We will not let this stand.”
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Contact Carly Ross on 07860 642826