• April 19, 2024
 Green farming initiatives ‘should not’ lead to IHT penalties

Green farming initiatives ‘should not’ lead to IHT penalties

In recent developments, British farmers are voicing their concerns over the economic pressures posed by the importation of cheap foreign food, which is impacting their incomes significantly, as reported by The Telegraph.

This growing unrest has led to protests, including a notable demonstration at the port of Dover, where tractors and slow-moving vehicles lined up on roads causing traffic disruptions. The protest highlights the farmers’ struggle to balance the production costs with the prices at which supermarkets sell British produce, often cited as being lower than the cost of production itself.

Farmers find themselves at a crossroads between catering to consumer demands for affordable food and the necessity to sustain a viable livelihood. Despite political figures expressing sympathy towards the agricultural sector, the reality remains that the majority of voters are consumers, which complicates the implementation of supportive measures for farmers.

A significant point of contention is the potential loss of inheritance tax (IHT) exemptions for agricultural land dedicated to rewilding projects. As part of environmental conservation efforts, farmers are encouraged to allocate portions of their land for green schemes. However, this move could subject the land to IHT, contradicting the incentives provided for agricultural activities. Currently, land used for crop cultivation or livestock rearing benefits from Agricultural Property Relief, facilitating the intergenerational transfer of farms.

The issue was addressed by Chancellor Jeremy Hunt in his budget announcement last March, with a consultation concluding in June. Yet, as another budget announcement approaches, the policy regarding IHT eligibility for farmers engaging in rewilding remains undecided. This uncertainty underscores the need for clear guidelines and support for the agricultural sector.

The agricultural community awaits decisive action that would provide clarity and assurance regarding their financial and operational futures, especially in the context of environmental initiatives. As the situation develops, the outcome of the forthcoming budget announcement is keenly anticipated by farmers and stakeholders within the industry.

Katie Johnson, Digital Journalist, Today's Media

Digital Journalist, Today's Media Contact: katie.johnson@todaysmedia.co.uk LinkedIn