Shaun recently listened to a speaker who had some interesting takes on this subject. We will spare their name. Partly out of fairness, and partly because what follows includes our own reflections.
There is near-universal agreement among those who understand Rachel Reeves’ proposed changes to Inheritance Tax: they are distinctly unfair to older-generation farmers.
The current tax regime has long encouraged farmers to hold onto their stewardship of land and assets until death, with the reward of Agricultural Property Relief and Business Property Relief.
Now, these same individuals face being penalised for doing that under the new rules.
Gifts made during lifetime can avoid Inheritance Tax if the donor survives seven years. However, there is a huge difference between making that decision at 51 vs. at 71 or 81.
The uncertainty of how much time we have left is what makes planning so difficult. These people are often asset-rich but cash-poor.
To create fairness and show empathy, perhaps the solution is simple: give those aged 70 and over a seven-year transitional exemption from the proposed changes. That would give time for orderly succession planning without punishing decades of behaviour shaped by previous tax policy.
There’s also an economic argument for this approach. Passing on farms and assets to the next generation could boost productivity and diversify rural economies. Younger owners may be more inclined, or better equipped, to embrace AI, drones, digital agronomy, or to take risks by diversifying into things like office lets or children’s adventure parks.
Any extra profits they make from that approach are taxed and flow into the Treasury’s coffers.
The speaker made a sharp point about how interest groups engage with politics.
If you want a policy change, does publicly criticising a government improve your chances? Or reduce them?
Instead of confrontation, would it not be wiser to approach it as a negotiation, a bit of The Art of the Deal? That’s what lobbyists have done for centuries.
Ask: What does the government want? And how can the farming community help deliver that?
Could we, for example, pledge more environmental actions or carbon reduction plans in exchange for tax concessions? Or help to facilitate the Government’s plans to build 1.5m new homes?
What do you think about fairness and taxes?