At the Finance Bill debate in Parliament on 12th January, I called for the removal of the anti-forestalling clause from the UK Government’s reforms to family farm taxation.
I believe this clause relating to Agricultural Property Relief is perverse and that it creates an appalling situation for farmers facing a terminal illness or in their elderly years.
This clause ensures that if a farmer transfers their farm but dies within seven years, then a substantial Inheritance Tax bill will be due, potentially triggering Capital Gains Tax (CGT). If no transfer is made and the farmer dies before April 2026, then the estate will pass tax-free.
Labour have thus created a situation whereby terminally ill or elderly farmers, especially those unlikely to live for a further seven years, are presented with a series of difficult and inhumane choices – keep the farm and hope to die before the changes come in in April 2026; sell the farm with a potential loss of food production; or transfer the farm in the usual way and saddle their children with an enormous tax bill.
Of course, these rules apply elsewhere but this is where we see Labour failing to understand what they are dealing with – a working farm is like no other business. What it produces concerns us all, not some segment or niche area of the economy.
NFUS President Andrew Connon is right to call the anti-forestalling clause “morally indefensible”. No tax policy should ever place a terminally ill farmer in the position of being financially better off dead than alive.
The Government need to understand the strength of feeling that exists on this important issue. Labour has already done enough damage to our farming sector and to our food security with 12 months of digging in their heels and refusing to listen to farmers and their representatives. Removal of the anti-forestalling clause must be an integral part of fixing their failure to protect farming families.
