First Minister John Swinney will later today (Wednesday, November 13) tell farmers he shares their concerns over changes to inheritance tax rules, as he addresses the AgriScot conference at Royal Highland Centre Edinburgh.
The UK government, without consultation, announced in the autumn 2024 budget that from April 2026, it will reform agricultural property relief (APR) and business property relief, which are reserved.
Inheritance tax will apply to combined agricultural and business assets over the £1 million threshold, which will be subject to inheritance tax at a reduced rate of 20%.
Inheritance tax
Ahead of addressing farmers and rural stakeholders at the NFUS seminar at AgriScot, First Minister John Swinney said:
“The chancellor’s decision to reform exemptions to agricultural property relief for inheritance tax has led to unacceptable levels of stress, worry and uncertainty amongst farmers in Scotland.
“The UK budget could scarcely have been more indifferent to the needs of rural communities and the rural economy, on top of a lack of certainty over long-term funding which we would have through membership of the EU, meaning we now have an inadequate settlement.
“I know this is already having a chilling effect on farming and rural businesses. The UK government must urgently commit to undertake and publish impact assessments on its budget proposals on farmers and crofters in Scotland.
The first minister added that the “Scottish government wants to see a tax system that supports rather than hinders orderly succession planning and the transfer of land to the next generation of custodians”.
“No matter whether or not a significant number of businesses are affected directly, it is deeply disappointing that the Chancellor chose not to work with the Scottish Government before acting on this sensitive matter.
“The UK government must also provide clarity on the future of financial support for the sector, after confirming in the Autumn Budget that agricultural funding will be baselined.
“Any move to break the link between land area farmed and funding increases in Scotland ignores our ongoing commitment to active farming and food production, and could constrain our efforts to transform our industry for the future,” he explained.
