Moray politician argues Agricultural Property Relief changes mean family farms will be lost
Inheritance tax rule changes for farmers will have a “devastating” impact, a local MSP has argued.
New measures, announced in Labour’s first budget for 15 years, mean that family firms could be taxed when land and buildings are passed on to the next generation.
Agricultural assets are currently exempt from inheritance tax but, from April 6, 2026, only the first £1 million of the farm’s value will be tax-free.
And the recipient will face a bill for 20 per cent of anything exceeding the threshold.
For example, a person inheriting a family farm valued at £2 million would be forced to either pay £200,000 or sell up.
The move has been met with fury from the farming sector and opposition politicians.
However, HM Treasury documents claim that “three quarters” of claims would be unchanged by the change, adding that just “the wealthiest 2000 estates each year” would be affected.
Announcing the budget, Chancellor Rachel Reeves said the measure would “ensure that we continue to protect small family farms”.
Highlands and Islands MSP Douglas Ross said: “Labour’s Family Farm Tax is disastrous for the sector and the Chancellor must now U-turn on these changes.
“The reduction in relief is a devastating blow for family farms here in Moray and across the country.
“Labour have shamefully broken their word to farmers. They promised last year there would be no changes to agricultural property relief but Rachel Reeves has pulled the rug from under them.
“That is why the Conservatives have launched a petition which I would encourage everyone to sign to force Labour to ditch this policy as soon as possible.
“The Budget announcement shows that Labour are completely disconnected from the real challenges facing farmers and are not interested in supporting them.
“As someone with a farming background I am proud to always stand up for them. I hope Rachel Reeves will show some common sense and restore inheritance tax relief to its previous levels for our hard-working farmers in Moray and across the country.”
A statement released by NFU Scotland President Martin Kennedy strongly criticised the budget, warning that it would have a “seismic impact” on the sector.
“NFU Scotland is crystal clear that the Budget announced on Wednesday, unless radically changed, will have a seismic impact on Scotland’s farmers and crofters,” he said.
“We will be writing to the Chancellor regarding her budget announcement, and we will be encouraging members to contact their MPs.
“This Budget has completely unnecessarily created anger, frustration and worry and it is inherent on the Government to return to its pre-election promises, unpick the damaging budget, and stand by the farming sector.”
