Lords Hear Concerns Over Inheritance Tax Impact on Northern Ireland Farms
Farmers in Northern Ireland participated in tractor rallies on Saturday to show their support for the National Farmers’ Union’s Stop the Family Farm Tax campaign.
Concerns were raised in the House of Lords that inheritance tax reforms will have a significantly negative impact on Northern Ireland’s agricultural communities, potentially driving many farming families to financial ruin.
Lord Maurice Morrow addressed his colleagues in the Lords, highlighting that the proposed changes will exacerbate the challenges faced by Northern Ireland’s agricultural sector, already grappling with rising costs and stringent post-Brexit regulations.
These reforms, as outlined by Chancellor of the Exchequer Rachel Reeves, include the introduction of a 20 percent inheritance tax on farms valued over £1 million, which Morrow believes will unfairly target Northern Ireland due to the higher cost of land in the region.
A recent report from the House of Lords Library illustrated that the average land value in Northern Ireland is significantly higher than in other parts of the UK, emphasizing the potential impact of these inheritance tax reforms on farming families.
Lord Morrow and others have voiced concerns that these changes may force family members who have dedicated their lives to farming to sell off land and assets to cover the tax burden resulting from a parent’s death.
‘Culling’ Lines of Succession
Similar sentiments were echoed by fellow DUP peer Lord Robert McCrea, who warned that these measures could disrupt the line of succession for countless farms across Northern Ireland.
According to McCrea, the inheritance tax plans could lead to families having to sell off assets to cover tax liabilities, putting the livelihood of farming families at risk.
In defense of the reforms, the government has emphasized the need to address a substantial budget deficit left by the previous administration, claiming that the tax changes are essential to fill this financial gap.
Despite criticism from farmers and lawmakers, the government has stood by its decision, asserting that the reforms aim to rectify a system that had previously benefited the wealthiest landowners to the detriment of others.
The government has outlined a revised system that will provide relief on the first £1 million, with a reduced 20 percent tax rate on amounts exceeding that threshold, rather than the standard 40 percent inheritance tax.
Estates making claims for reliefs will still receive substantial support from the government, which is estimated to cost £1.1 billion in the first year.
Supermarkets Back Farmers
In response to the proposed reforms, farmers in Northern Ireland and across the UK have been mobilizing to protest against the inheritance tax changes, with tractor rallies and demonstrations held to support the National Farmers’ Union’s campaign.
Major supermarkets, including Tesco, Morrisons, and Asda, have also expressed solidarity with farmers, acknowledging their concerns and advocating for a reconsideration of the inheritance tax reforms.
