Time is right to finesse IHT plan

Good politicians know when to change their minds – and aren’t afraid to do so when the time is right. Especially when mounting evidence suggests that doggedly pursuing a policy will harm the very people it was designed to protect.

This is the challenge facing the government after a cross-party group of MPs recommended that Chancellor Rachel Reeves delays plans to impose inheritance tax on farmers – and comes up with a more appropriate tax proposal instead.

Off-ramp

The recommendation to delay is striking because the Environment, Food and Rural Affairs Committee includes seven Labour MPs. Without their support, the commitee’s call for a delay wouldn’t have seen the light of day.

It provides the Chancellor with an off-ramp – an opportunity for the government to back down with dignity on its controversial proposal to levy 20% inheritance tax on farming assets worth more than £1 million from April 2026.

Should she choose to do so, the Chancellor can cite the advice of her own backbenchers and show that she is prepared to listen and rethink one of the most damaging policies of Labour’s short time in government.

It is unlikely that the inheritance tax proposal will be scrapped completely. But as the Tenant Farmers Association has pointed out, it is abundantly clear to anyone who has scrutinised the plan that it is not fit for purpose in its current form.

Different approach

As TFA chief executive George Dunn has argued, the policy must be finessed before it is introduced so that it achieves the government’s stated aim of raising tax revenue and ensure that wealthy individuals cannot “hide” their wealth by buying farmland.

Farming organisations have proposed a number of ways that the government could tweak the policy to achieve its objectives while mitigating against the negative, unintended consequences of its current approach.

Time will tell whether the government will eventually listen. But huge damage will be caused to farming families should it fail to do so. It’s not only the right time for the Chancellor to back down – it’s long overdue.

Johann Tasker Editor