NFU President Minette Batters said 鈥渋t鈥檚 good to see Labour has listened to our concerns and recognised the importance of keeping this policy鈥�.
She added: 鈥淭his relief is essential to family farms, helping to keep small family businesses alive and continuing to produce high-quality food while also caring for our cherished countryside.鈥�
Risk of removing APR
Ahead of the announcement, the NFU briefed Mr Reed鈥檚 team on the issues surrounding APR.
Currently, APR is available on agricultural land whether used by the owner or a tenant.
We warned if APR was removed, landowners may be deterred from letting their land when they could instead secure BPR (Business Property Relief) if it were farmed in hand or used for anther trading activity.
Over a third of land is rented in by farmers and around two-thirds of farmers rent in at least some of their land.
The impact would therefore also be felt across the industry, from tenant farmers and new entrants lacking the capital to buy land, to farms looking for the flexibility to expand and contract their farming operations as required without committing additional capital to purchasing land.
鈥�It鈥檚 good to see Labour has listened to our concerns and recognised the importance of keeping this policy.鈥�
NFU President Minette Batters
皇家华人believes that any removal of APR is unlikely to raise much in the way of tax, but could lead to a contraction in the amount of rental land for farmers.
This would then have a wider impact on food security if landowners were to remove their land from tenancies and from food production.
鈥淭he return on capital for farming can be very low and would be insufficient to pay a 40% inheritance tax charge. This would effectively mean using up all of the profits and remove any ability to invest in the business,鈥� said NFU Head of Tax Michael Parker.
The news follows NFU lobbying earlier in the year on whether APR should be extended to cover all ELMs (Environmental Land Management schemes) following a government consultation on the scope of APR from inheritance tax.
We will also be reiterating our ask of the government to remove the uncertainty over the tax treatment of agricultural land entered into environmental schemes ahead of next year鈥檚 Spring Budget.