The CLA has strongly criticised the UK government’s impact assessment of changes to inheritance tax published this week along with the draft legislation of the policy.
The government has claimed capping vital inheritance tax reliefs for farmers and family businesses will not have “any significant macroeconomic impacts”.
The reforms are due to come into force in April 2026, with the government arguing it “is not expected to have a material impact on food security” and “would not be expected to impact the UK’s ability to source imports from international markets”.
The Country Land and Business Association (CLA) has argued that there will be drastic consequences for landowners, and has offered an alternative via the ‘clawback’ mechanism.
CLA president Victoria Vyvyan said: “This government is incapable of listening. The ending of vital inheritance tax reliefs will crush farming and family businesses, but the Treasury remains deaf, blind and indifferent to the damage to the economy.
“The CLA has made clear, and costed, the consequences of this ideological folly; the loss of jobs, the reduction in GVA [gross value added].
“Together the industry has offered a sensible alternative via the ‘clawback’ mechanism. The Treasury has given no reason for failing to consider an alternative.
“This is not an impact assessment; it reads like an amateur note from an arrogant government setting and marking its own homework and simply not understanding businesses and food security,” she added.
The CLA claimed that the new measures are a tax burden on businesses which were delivered without consultation and with little engagement.
“Farmers and family businesses are the backbone of the economy and deserve to be heard by a government that seems hell-bent on pressing ahead, indifferent to the slow but inevitable train crash,” Vyvyan added.
Further backlash on inheritance tax
Meanwhile, Upper Bann MP Carla Lockhart said she is “outraged” following this week’s unveiling of the draft legislation, which includes measures to reform Agricultural Property Relief (APR) and Business Property Relief (BPR).
She said: “The Labour government is not listening to the electorate. The chancellor outlined her intentions in the autumn budget, and from the outset I have been strongly opposed to the proposals aimed at axing historical APR and BPR.
“Existing legislation was introduced by a previous Labour government to protect family businesses during periods of national economic turmoil.
“The current Labour government wants to levy a 20% ‘death tax’ on farm business assets over the £1 million threshold,” she said.
The MP claimed that the government and Labour Party chancellor have set themselves on a “collision course” to destroy family farms in the UK.
“Chancellor Rachel Reeves is etching her name in the history books for all the wrong reasons, creating a lasting legacy that will long out-live the current Labour leadership,” Lockhart said.
“The Finance Bill presents another opportunity for the government to step-back and rethink its draft tax clauses.”
The Upper Bann MP has stated that the UK economy is struggling and claimed that the chancellor is willing to sacrifice the country’s £48 billion agri-food sector which provides employment for over four million people.
“Sir Keir Starmer and the chancellor are ignoring legitimate concerns and refusing to participate in roundtable talks,” Lockhart continued.
“They cannot continue to dismiss genuine calls for a more balanced and practical way forward.”
The DUP Agriculture, Environment and Rural Affairs spokesperson, continued: “The evidence is overwhelming with numerous experts confirming that the government’s figures are mis-calculated.
“The £1 million threshold is too low, especially when the value of farmland, sheds, livestock etc is taken into account. Small farms in Northern Ireland can easily exceed that figure.
“For years farmers have been encouraged to modernise, diversify and invest to expand their businesses, but now they are being penalised unfairly by this vindictive ‘tax grab’, a move which will destroy generations of family farms,” she added.
Lockhart is also supportive of a ‘clawback’ mechanism designed to increase Treasury revenue, while protecting working family farms.
