PARLIAMENTARY WRITTEN QUESTION
Agriculture: Inheritance Tax (31 October 2024)

To ask the Chancellor of the Exchequer, with reference to paragraph 2.51 of the Autumn Budget 2024, published on 30 October 2024, what guidance her Department issues to small business farmers who wish to keep an inherited family farm.

Asked by:
Mr Andrew Snowden (Conservative)

The Government has published information about the reforms to agricultural property relief at https://www.gov.uk/government/news/what-are-the-changes-to-agricultural-property-relief#:~:text=From%206%20April%202026%2C%20the,rather%20than%20the%20standard%2040%25. Almost three-quarters of estates claiming agricultural property relief in 2026-27 are expected to be unaffected by these reforms.

Individuals can pass up to £325,000 inheritance tax free, and £500,000 if includes a residence to a direct descendant, and £1m when a tax free allowance is passed to a surviving spouse or civil partner.

The reforms to agricultural property relief and business property relief mean that farmers can access 100% relief for the first £1 million and 50% relief thereafter - meaning an effective tax rate of up to 20% on those assets. These reliefs are in addition to the normal inheritance tax allowances, and mean any couple, whether or not married, could pass on up to £1.5 million each or £3 million tax-free between them.

Individuals will need to consider their own circumstances and may wish to speak to a tax advisor or accountant.

Answered by:
James Murray (Labour)
8 November 2024