A Cheshire MP has renewed her calls on the government to drop its plans to introduce inheritance tax on agricultural property, saying the change will “devastate family farms”.
Tatton MP Esther McVey said local farmers were extremely worried about how the change would affect them.
Speaking during a debate in Parliament she said: “This brutal change to inheritance tax – let’s call it what it is, a family farm tax – will destroy family farms and will destroy farming in the UK as we know it.”
The government has insisted, however, that the majority of farmers would not be affected by the tax changes.
Under the new rules, a farm worth more than £1m would be subject to 20% inheritance tax – which is half the usual inheritance tax rate.
Farms were previously exempt entirely, meaning they paid no inheritance tax when they were passed from one generation to the next.
The change came about as the government wanted to close a loophole which enabled rich individuals to avoid paying inheritance tax by passing on their wealth by buying farmland.
Ms McVey has been vocal in her opposition since the changes were announced and has repeatedly called on the government to ditch the policy.
The Tatton MP said it was her view that the Labour Party incorrectly believed all farmers were rich and would be able to find the money to pay the tax bills.
She said: “Farmers have been clear – they are asset rich, cash poor.
“The money to pay huge sums in inheritance tax is not there and the only way to raise that money is to sell off land.
“That then throws the future of the businesses into jeopardy because there may not be enough land to continue farming on.
“There is a complete lack of understanding from government over this, both in terms of land needed to farm and also what this would do to food security, food prices and the industry as a whole.”
Mc McVey said farmers disputed the government’s claim that only the largest farms would be affected, and said it was estimated that farms with 100 acres of land would reach the threshold.
She said farmers had told her that to make a business viable, they needed upwards of 200 acres in many cases.
“It makes a nonsense of Labour believing in UK food security and the government needs to u-turn straight away,” Ms McVey said.
