Rachel Reeves’s proposed changes to agricultural relief on inheritance tax—dubbed the “tractor tax”—may impact five times more farmers than the government has estimated, according to the Central Association of Agricultural Valuers (CAAV).
The Treasury has stated that the changes will affect approximately 500 farmers each year. However, Jeremy Moody, secretary and adviser to the CAAV, argues that this figure is incorrect due to a misunderstanding of the farming industry’s complexities. He asserts that the new measures will actually impact around 2,500 farmers annually.
Moody contends that the Treasury’s analysis overlooks farmers who only claim Business Property Relief (BPR) and not Agricultural Property Relief (APR). This includes individuals who own land but not the farmhouse, those in farming partnerships, tenant farmers without ownership of land or buildings, and farmers who are shareholders in family companies.
“They’re wrong because they’re working on an incomplete picture,” Moody said. “What they got wrong is, they didn’t know what to ask and HMRC couldn’t answer them even if they had.”
He estimates that over a generation, about 75,000 farms will be affected by the changes.
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