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NFU Scotland has submitted a formal response to the UK Government’s consultation on the Draft Finance Bill, warning that proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) would have “severe and far-reaching consequences” for Scottish agriculture.
The submission, sent to HMRC this week, sets out NFU Scotland’s strong opposition to the current proposals and calls on the Government to consider alternative approaches that protect family farms while still generating revenue for the Treasury.
Jonnie Hall, Director of Policy at NFU Scotland, said: “The Government claims its reforms are about fairness and sustainability, but the reality is quite different. These changes, even before implementation, are creating uncertainty and fear across our industry. They pose a serious threat to the continuity of family-run farm businesses and will undermine domestic food production and the future of our rural communities.”
NFU Scotland’s submission challenges the Government’s assertion that the proposals are fair or effectively targeted. The Union highlights findings from a recent Centre for the Analysis of Taxation (CenTax) report which shows that:
- The current proposals would disproportionately affect working family farms more than diversified estates or landowners using agriculture as a peripheral activity.
- Over 50% of farming businesses - including owner-occupiers and tenants - would face higher tax bills, compared to just 20% of non-farming landowners.
- 70 estates per year would not be able to meet their IHT liabilities even by selling non-farm assets, threatening their future viability.
NFU Scotland welcomes the CenTax report that sets out a number of proposals which would raise equal or greater tax revenue but be better targeted. These include:
- A ‘Minimum Share Rule’ offering greater protection for genuine farming businesses.
- An ‘Upper Limit on Relief’, capping the value of assets qualifying for full relief.
- A combined approach which could raise nearly double the revenue of the Government’s current plan while protecting family farms.
The Union also criticises the proposed implementation date of April 2026, calling it “unrealistic and damaging”, and aligns itself with the House of Commons EFRA Committee’s recommendation to delay the reforms until 2027.
NFU Scotland’s submission also highlights serious flaws in how the proposed changes would impact:
- Scottish tenancies – with current provisions failing to address the differences for tenants in Scotland.
- Food security – warning that the Government’s stated view that IHT changes will have no impact on food availability is “deeply concerning and out of touch with recent global realities.”
- Mental health and succession planning – flagging the growing anxiety among older farmers and their families due to the uncertainty these changes create.
“We’re not arguing against reform – we’re arguing for smart, fair, and workable reform,” said Hall. “There are better ways to raise tax revenue without undermining an industry that is vital to Scotland’s economy, communities, and national food security. If implemented as drafted, these proposals risk dismantling generational businesses and driving investment out of rural areas.”
NFU Scotland is urging the UK Government to pause the current proposals, review the evidence, and engage directly with farming organisations to develop a fairer path forward.
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Contact Carly Ross on 07860 642826