A senior accountancy figure has issued a plea on behalf of Cumbria’s rural economy amid fears the new Labour government will axe the Agricultural Property Relief scheme.
It was claimed at various points during the pre-election period that Labour was planning to unleash a £1 billion inheritance tax raid on the farming community if it won a Commons majority.
Now Paul Hornby, managing director of JF Hornby & Co, has called upon the new administration to carefully consider the unique needs of the rural economy before making any decisions.
Paul said: “The potential abolition of Agricultural Property Relief (APR) is deeply concerning. This relief is a lifeline for many farming families, allowing them to pass on land and buildings without the crushing burden of inheritance tax.
“Removing APR would be a devastating blow to the agricultural sector. The financial impact would be severe, potentially forcing many farming families to sell their land to cover inheritance taxes.
“This, in turn, could lead to a domino effect, with the loss of family-owned farms diminishing the local economy and eroding the fabric of rural communities.
“The human cost is equally significant – generations of farming heritage and expertise could be lost, along with the sense of identity and purpose that farming provides to so many families.
“My plea to the new government is that they carefully consider and assess the impact such a move would have on the rural economy, before taking any decisive action.”
Agricultural Property Relief (APR) is a tax break in the UK that helps reduce the value of agricultural property when calculating inheritance tax.
This means that when a farmer passes away, their family can inherit the farm without having to pay a large tax bill.
APR can cover up to 100% of the property’s agricultural value, provided the land has been used for farming and meets specific criteria.
This relief ensures that family farms can be passed down through generations without financial hardship.
A recent report from the NFU revealed Cumbria had 5,135 farm holdings, on which can be found 56,000 head of beef, upwards of two million sheep grazing in the fields, and 108,000 dairy cows producing 900 million litres of milk per annum – the second-largest dairy herd in the UK. Farming in the county directly employs more than 12,000 people on either a full-time or part-time basis.
Paul said: “Agricultural Property Relief is crucial for ensuring the continuity of farming operations across generations. Without it, many families will face impossible tax bills, leading to the fragmentation and sale of agricultural land.
“This isn’t just about financial loss; it’s about losing a way of life, disrupting local economies, and the potential disintegration of rural communities. The government must understand the profound human and economic consequences that such a decision would entail.”
