You couldn’t make it up!
It will come as news to no one that the government wants UK farmers to get involved with schemes that will see part of their land ‘re-wilded’ to help tackle climate change.
With pressing environmental issues to consider, ministers have set ambitious targets of getting 75% of farmers involved in what it describes as low carbon practices – turning farm land over to woodland, wetlands, or scrub – by 2030.
But there is a major catch and one which is likely to have a very chilling effect on these schemes.
Farmers who get involved in them lose their inheritance tax benefits for the land converted to an environmental purpose, meaning their children will have to stump up a tidy sum on their death.
With inheritance tax running at 40%, this could run into thousands of pounds, putting many small family farms out of business.
Ian Parker, partner and agricultural tax expert at Whitely Stimpson, branded the situation ‘ludicrous’.
He said:
“The family farm is the fabric of our countryside and the only reason that has been able to exist is because the tax laws have allowed for the farm to be passed down the generation without a crippling inheritance tax burden. Expecting farmers to play a fundament role in tackling climate change but then punishing them with tax hikes seems incredibly unfair and will certainly discourage many from getting involved. The government needs to have a urgent rethink of this strategy if it is serious about getting three quarters of farmers signed up to one of these schemes in just over six years’ time.”
If you need to discuss the best way forward for your farming business, get in touch on (01295) 270200 or email ianp@whitleystimpson.co.uk.
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