Union’s long-standing position on IHT vindicated by powerful parliamentary report
NFU Scotland has today welcomed the House of Commons Environment, Food and Rural Affairs (EFRA) Committee’s recommendation that proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) under Inheritance Tax (IHT) rules be paused until 2027 - a move the Union has consistently called for since January.
The cross-party report, published this morning, highlights serious concerns over the lack of consultation, absence of impact assessment, and potential negative consequences for family farms, tenant farmers and food security.
The Committee’s call for a full impact assessment also complements the ongoing Farm Profitability Review, led by Baroness Minette Batters, which NFU Scotland believes must inform any future tax decisions affecting farming.
“This report is a vindication of everything we’ve said since January,” said NFU Scotland President Andrew Connon. “Our farmers, crofters and growers have faced months of anxiety, not just about future planning but about survival. The EFRA Committee has now echoed our call to pause and rethink these damaging proposals. We thank them for listening and we urge HM Treasury to do the same.”
The EFRA report calls for the UK Government to:
- Delay IHT reforms until October 2026, with changes taking effect no earlier than April 2027
- Conduct full consultation and evaluation of the impact on profitability, land values, tenant farming and rural viability
- Consider alternatives to the cap, such as clawback provisions, that protect family farm continuity
NFU Scotland has worked with the other unions to lead the national campaign opposing the reforms, arguing that Scotland’s larger average farm sizes make its farm businesses especially vulnerable. Internal analysis shows that under the current proposals, many farms could face annual IHT bills of over £100,000 for a decade - wiping out profits and forcing land sales.
“We recognise the Government’s intent to modernise the tax system and close unintended loopholes. But it's essential that reforms to inheritance tax are workable, proportionate, and reflect the realities of farming in Scotland,” said Jonnie Hall, NFU Scotland Director of Policy. “The EFRA Committee’s report offers a valuable opportunity for Treasury to work with the sector to get this right, protecting farm succession while meeting fiscal goals.”
NFU Scotland is calling for:
- An immediate pause in IHT reforms
- Full UK-wide consultation with rural stakeholders
- The consultation to consider potential impacts of the proposed changes across the UK nations, given variations in farming structures, economic conditions and legal systems.
Notes to editors:
- Full details of the EFRA Committee report can be found here
- NFUS briefing to Scottish MPs (January 2025) and campaign materials available on request.
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Contact Carly Ross on 07860 642826