Farmers who plough money into carbon reduction may have to shelve those financial commitments if the government presses ahead with its proposed inheritance tax changes, according to farmers in Cheshire.
Under the new rules, any farm worth more than £1m would be subject to 20% inheritance tax – which is half the usual inheritance tax rate.
Farms were previously exempt, however, meaning they paid no inheritance tax when they were passed from one generation to the next.
Richard Yarwood, whose family has farmed in Brereton, near Holmes Chapel, for 100 years spoke this week at a meeting of Cheshire East Council’s environment and communities committee about the authority’s carbon action plan for the borough.
He told councillors his farm manages about 5,000 tons of soil carbon and uses milk production methods that leave a low carbon footprint.
“All this is jeopardised by the changes to inheritance tax proposed,” Mr Yarwood said.
He implored councillors to oppose the inheritance tax budget changes, saying: “Long-term commitments to carbon reduction would be shelved straight away in order to just try and survive this tax.”
He added: “How can carbon neutrality be achieved if key stakeholder businesses’ viability is crippled by inheritance tax?
Fellow Cheshire farmer Robert Brunt told the committee: “Cheshire farming is uniquely placed to produce high welfare, low carbon food whilst sequestering carbon into hedgerows, trees, grassland and peat areas, whilst providing wildlife habitat and patchwork scenery.
“But we can only do this if we have the money to invest in the farm business.
“For us, the changes to the farm inheritance tax would put us in the situation where we will no longer have the money to make such investments into the business to continually improve our environmental footprint.”
During discussion of the borough-wide action plan, council officers said the authority was an “influencer” and could encourage people to reduce their carbon footprint.
They conceded, however, that there was no additional funding available to assist them in influencing farmers or others to follow the strategy.
