Debate contribution: Inheritance Tax Changes: Impact on Family Farms

Debate contribution by Mr Tom Buchanan on 11 February 2025.

MLA

Mr Tom Buchanan

Party at the time

Democratic Unionist Party

Date

11 February 2025

Type

Debate contribution

Business

Private Members' Business

Heading

Inheritance Tax Changes: Impact on Family Farms

Assembly identifier

Official Report component 4793720

Read the official Assembly record

Text

The announcement of the Chancellor's Budget in autumn 2024 not only dealt a body blow to the agriculture industry in Northern Ireland but was a complete betrayal of our hard-working family farmers, who are the cornerstone of our economy and a fundamental part of our local communities and rural life. The dismantling of historical agricultural property relief and the introduction of a 20% inheritance tax on family farms that are valued in excess of £1 million is an unprecedented and unjust assault on the backbone of this vital industry. It threatens livelihoods and the very survival of family farms and has the potential to force many farm businesses to sell off land and assets in order to keep them out of debt as they struggle to manage huge tax liabilities. The Northern Ireland Rural Valuers' Association (NIRVA) and the Central Association of Agricultural Valuers recently published an in-depth report into the impact of the October 2024 Budget inheritance tax charges on the farming community, which revealed stark challenges for the continued livelihoods of the farming community. The study assessed the values of nine typical farm types, focusing on those that primarily produce a livelihood. The findings demonstrate that many of those modest owner-occupied farms, often in sole ownership, are highly vulnerable. They face severe financial burdens that could force drastic operational changes to their businesses. It was noted that if the tax charge for a 67-head lowland suckler herd in sole ownership was £297,000, that farm business would have to pay £29,700 a year over a 10-year period. That is unsustainable for any farm business. Furthermore, the assessment highlights just how difficult it would be for a new farm successor to invest and develop the business when it is required. Financial pressures created by the inheritance tax changes would prevent farmers from investing in new technologies, the uptake of which is needed to help meet environmental targets as set by DAERA and, of course, the stringent targets that have been set by the AERA Minister in Northern Ireland. That includes farm renewables, low-emission slurry spreading, air pollution reduction technology and the restoration of habitats. Given that 79% of farm businesses in Northern Ireland are classified as small farms, some of those could remain under the tax threshold where there is some form of diversification; for example, contracting businesses, holiday accommodation or renewable energy production. However, it is increasingly clear that, over time, even small farms such as those would be pulled over the threshold, especially when inflation is taken into account. The net effect of the proposals will, effectively, leave working farms in a much poorer financial state and will, undoubtedly, discourage the next generation from taking up the reins or investing in carrying farming forward into the future. The message is quite clear: if we do not have policies that support the sustainability of the agriculture sector, which is the backbone of our economy and our communities, our economy will suffer, our food production will suffer, and the prosperity of that great industry will suffer. Where there are no farms, there is no food and no future for the upcoming generations in our agriculture industry. I welcome the Minister here today to hear and respond to the debate. I support the call from my colleague Michelle McIlveen for the Minister to do more to help the farming community in Northern Ireland. As Mr Butler said, words without action are no good. We need to see tangible actions from this Minister that show that he is genuine in going forward to support the farming community in Northern Ireland if we want to see it survive.

605 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 12:00 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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